Stock markets rose sharply Thursday following the release of a report that suggested that U.S. manufacturing was shaking off a four-month slump. The S&P/TSX composite index surged by 125.51 points to close at 6,740.05.

All of the TSX sub-indices were up on the first trading day of 2003, with the information technology index posting a gain of 6.63%.

Nortel rose 38¢ to $2.90; Celestica was $1.55 higher at $23.60; ATI Technologies gained 72¢ to $7.99.

Among industrial issues, Bombardier shares rose 33¢ to $5.65. Alcan was $1.67 higher at $48; BCE gained 60¢ to $29.10.

Cognicase shares rose 30¢ to close at $4.40 after CGI Group raised its takeover offer for Cognicase to $4.50 a share and Cognicase accepted it.

Oil stocks moved up as the price of crude took another jump on news that U.S. inventories were at their lowest levels in 26 years because of the Venezuela general strike.

EnCana rose 62¢to $49.40; Petro-Canada climbed 54 cents to $49.45.

The heavily weighted financial index pushed forward 1.6% as Royal Bank rose 46¢ to C$58.31. TD Bank gained 77¢ to $34.78.

The gold sub-index was flat as the price of bullion fell by US$1.70 an ounce. Barrick Gold rose 35¢ to close at $24.70; Kinross Gold slipped 6¢to $3.81.

Market momentum was overwhelmingly positive as 638 issues advanced, 385 declined and 176 were unchanged. Volume was slim as 147.7 million shares worth $1.33 billion changed hands.

The TSX Venture Exchange finished up 9.28 points at 1,083.36.

In New York, U.S. markets rallied after the Institute for Supply Management said its index of manufacturing business conditions rose to 54.7 from 49.3 in November — far above the modest increase to 50.3 analysts had
expected.

The Dow Jones Industrial Average soared 265.89 points at 8,607.52. The tech-heavy Nasdaq composite Index climbed 49.34 points to close at 1,384.85. The S&P 500 was up 29.2 points at 909.02