Toronto stocks climbed Tuesday afternoon to growing optimism over corporate earnings lifted bank and insurance stocks higher. The S&P/TSX composite index closed up 12.16 points at 6,582.92.

The heavily weighted financial services sector advanced with a 0.55% led by insurer Fairfax Financial, which climbed $8.03 to $113.51. Other gainers included Manulife Financial, up 64¢ to $38.60, and TD Bank, up 36¢ to $35.06.

In earnings news, Imperial Oil’s profits for the latest quarter were almost five times higher than a year ago — the best in the company’s history.

Net earnings came in at $538 million as revenue increased by more than half thanks to strong crude oil and natural gas prices and solid refining and retail margins. But its shares dropped $1.14 to $44.

Air Canada shares fell 6¢ to $1.13. Air Canada’s lawyer told an Ontario judge Tuesday that the company wants to resume negotiations with its unions next week but he warned that more layoffs are looming beyond those already announced by the insolvent carrier.

In economic news, the SARS virus outbreak and its impact in Canada has led Ted Carmichael, an economist J. P. Morgan Securities, to cut his growth forecast for the current quarter. He predicted that SARS will reduce real gross domestic product growth by an average of 0.1% per month in March, April and May.

As well, Statistics Canada reported that wholesale trade in Canada slipped by 0.2% in February, ending eight straight months of growth.

The junior TSX Venture Exchange gave up 2.56 points to 1,047.31.

In New York, stocks jumped as investors welcomed solid earnings from defense contractor Lockheed Martin and other companies, putting aside jitters about profitability in the quarters to come.

The Dow Jones industrial average climbed 156.09 points to 8,484.99, while the S&P 500 advanced 19.36 points, to 911.37. The tech-heavy Nasdaq composite index gained 26.99 points to 1,451.36.

Both the S&P 500 the Nasdaq ended at their highest levels in about three months.

In other U.S. business news, the U.S. Securities and Exchange Commission met behind closed doors on Tuesday to put the finishing touches on a long-awaited, US$1.4-billion legal settlement in the Wall Street stock analyst scandal.

A formal SEC vote to approve the settlement may not occur for a few more days, said sources familiar with the matter.

Also on Tuesday, U.S. President George W. Bush said that Federal Reserve chairman Alan Greenspan should get another term.

Greenspan, who turned 77 in March, has been chairman of the U.S. central bank since August 1987. His current four-year term runs to June 20.

The Canadian dollar closed above US69¢ for the first time in three years Tuesday as currency traders sold off the U.S. greenback.

Weakness in the American currency helped propel to loonie to a close of US69.09¢, a gain of 0.33 of a cent from Monday.