There’s nothing quite like a couple of big mergers to light a fire under the markets.

That was the case Tuesday as both Wall Street and Bay Street finished up for the day, thanks largely to merger news in the U.S. mobile phone and banking industries. U.S. markets also got some help from some good economic news.

The Dow Jones industrial average, open after the holiday Monday, climbed steadily throughout the day, finishing up 87.03 points or 0.82% to 10714.87. The broader Standard & Poor’s 500 Index jumped 11.18 points or 1% to 1156.95. The technology-focused Nasdaq Composite Index ended the day up 26.79 points or 1.30% to 2080.35.

The news from the U.S. spurred Bay Street, which also got some help form the metals sector. But the enthusiasm was tempered by some disappointing company earnings. The S&P/TSX composite index gained 19.59 points or 0.22% to 8767.1; at midday it had been ahead by 27 points. The TSX venture Exchange was also up, by 3.56 points or 0.19% to 1900.54. Volume on The TSX was 326.9 million shares, while 106.6 million shares were traded on the TSXV.

Mining shares got a lift from higher base metal prices, leading the materials sector to a gain of 1.6% on the day, the best of all sectors. The information technology group gained 0.5%. Four of the TSX’s 10 subindices ended higher.

The big banks are set to report first-quarter results next week, and the financial index fell 0.07%.

In company news, Loblaw Cos. Ltd. reported a fourth-quarter profit of $294 million or $1.06 a share, up 10%, while sales rose 13%. The grocery chain’s earnings per share fell short of analysts’ average expectations. Also, the quarterly loss at Ballard Power Systems Inc. widened by 10% to US$38.8-million or 33¢, partly because of investment writedowns and restructuring costs.

The gains on Wall Street ended a couple of days of profit-taking from Thursday and Friday of last week. The big news to start the day was the announcement that mobile phone operator Cingular Wireless’ top bid (US$41 billion) to buy rival AT&T Wireless had been accepted, creating North America’s largest wireless operator. It also fueled optimism that more deals may be on the horizon.

Indeed, two other mergers were announced, both in the financial services sector, where two U.S. banks unveiled deals to buy rivals. New York regional bank North Fork Bancorp. agreed to buy cross-town rival GreenPoint Financial Corp. for US$6.3 billion in stock, creating one of New York City’s biggest retail banks. National City Corp., the No. 10 U.S. bank, said it will buy Provident Financial Group Inc. for about US$2.1 billion in stock, combining two of Ohio’s largest banks.

Meanwhile. a report from the Federal Reserve showed output at U.S. factories, mines and utilities jumped in January as cold weather boosted natural gas and electricity demand, adding to investors’ optimism. In a separate report, the Federal Reserve Bank of New York said its two-year-old Empire Manufacturing Survey’s business conditions index rose to a record 42.05 in early February from 38.85 in January.

“We have some buyout activity as well as some good economic information that’s kind of a one-two that’s really got this market off to a good start for the week,” said a U.S. trader.

In currency matters, the U.S. dollar fell again, sending the euro up to US$1.2825 in Europe, while the Canadian dollar was up by 0.26¢ to US76.27¢.