Toronto stocks finished higher Tuesday lifted by a rally in technology shares. The S&P/TSX composite index rose 63.58 points to close at 7,474.91.

The information technology sector finished 3.8% ahead, while the heavily weighted financial index advanced 0.8%.

Technology stocks received positive comments from securities analysts.

Celestica rocketed ahead $2.59 to $23.80 as one of its competitors said customers were becoming optimistic.

Tech bellwether Nortel Networks rose 20¢, to $4.48, while Research In Motion was up 68¢ at $38.95.

Investors are expressing optimism for bank stocks as Canadian banks are set to report on their third quarters. CIBC is scheduled to release results on Wednesday.

CIBC, recently upgraded to “outperform” from “neutral” by Credit Suisse First Boston, rose 98¢ to $56.08.

TD bank rose 33¢ to $39.10 despite being downgraded to “underperform” from neutral” by CSFB.

Royal Bank gained 26¢ to $61.41, after the bank said it has reached a settlement agreement in the Enron bankruptcy case. Royal is set to receive $US195 million from Enron and other companies.

The junior S&P/TSX Canadian Venture composite index climbed 14.65 points to 1,249.73.

In New York, the Nasdaq Composite Index closed at its highest in 16 months as encouraging news from technology firms fed hopes that an economic rebound is under way.

The tech-heavy Nasdaq rose 21.50 points to 1,760.99, its highest close since April 2002. The Dow Jones industrial average rose 16.45 points to 9,428.90, while the broader S&P 500 index gained 2.59 points to finish at 1,002.33.

The Canadian dollar drooped against the US greenback on Tuesday, as a lower than expected inflation data was seen increasing the likelihood that the Bank of Canada will cut interest rates next month.

The loonie ended the session at US71.60¢, down from US71.91¢
cents, at Monday’s session close. Canada’s inflation fell to 2.2% in the year to July, its lowest level in 12 months.