The Toronto stock market surged 200 points higher on Friday as investors were soothed by the U.S. Federal Reserve’s surprise cut to the discount rate at which it lends money to banks.

The S&P/TSX composite index jumped 200.88 points, or 1.56%, to close at 13,049.58, after a volatile session.

The benchmark index lost 200 points on Thursday and was down 3% for the week.

Each 10 TSX main groups advanced. Energy added 1.61%, financials rose 2.04% and materials added 0.63%.

The September crude oil contract on the New York Mercantile Exchange gained 98¢ to US$71.98 a barrel.

Among banking stocks, CIBC added $2.17, or 2.4%, to $91.96. Royal Bank of Canada rose 60¢, or 1.1%, to $53.60.

BlackBerry maker Research In Motion Ltd. led the way in net gains, adding $7.06, or 10%, to close at $77.57.

Retailer Canadian Tire Corp. was second in line, climbing $4.48, or 5.4%, to $87.48.

The junior S&P/TSX Venture composite index gained 99.46 points, or 4.07%, to 2,544.69 after plunging almost 10% Thursday.

In New York, stocks surged after the Fed cut the discount rate it charges banks in an emergency move to stabilize credit markets and keep the economy on track.

The Dow Jones industrial average jumped 233.30 points, or 1.82%, to 13,079.08. The S&P 500 rose 34.67 points, or 2.46%, to 1,445.94. The Nasdaq composite index gained 53.96 points, or 2.20%, to 2,505.03.

The Nasdaq had its best day in a year, led higher by gains in Apple and Research in Motion.

But it was still down 1.6% for the week. The S&P 500 slipped 0.5% for the week, while the Dow’s weekly loss was 1.2%.