Toronto stocks rallied Wednesday, as the energy sector continues to boom on rising oil prices and the materials sector posted a strong session. The S&P/TSX composite index finished up 85.51 points, or 0.83%, to 10,671.44.

Volume on the senior exchange was 298 million shares.

Eight of the 10 TSX main sub-groups were up, with the energy group gaining 1.94%

Light sweet crude for September delivery moved up $1.83 to settle at a record US$64.90 a barrel on the New York Mercantile Exchange. Oil prices hit an intra-day high of US$65 on the Nymex.

Sector giant EnCana Corp. gained $1.77, or 3.38%, to close $54.17, while Suncor Energy Inc. lifted $2.87, or 4.27%, to close $70.08.

The materials group gained 1.14%. Alcan Inc. rose $1.21, or 2.97%, to close $41.90.

The heavily weighted financial sector lifted 0.49%. CIBC gained $1.03, or 1.45%, to $71.85, clawing back some of the big loss it took last week in the wake of a massive $2.4 billion Enron-related settlement.

In trade news, Canada claimed a victory in the softwood lumber dispute with the United States following a key NAFTA panel ruling, but Washington said it would keep imposing Ottawa with lumber tariffs and seek a negotiated settlement. Forestry company Tembec Inc. gained 53¢, or 18.47%, to $3.40 on the news.

Magna International reported a second-quarter profit of US$225 million – from US$188 million last year – on record sales of US$5.9 billion. However, the car parts manufacturer warned it expects its full-year earnings and second-half sales to fall. Magna shares fell $4.31, or 4.54%, to $90.70.

Sleeman Brewery reported second-quarter net earnings fell 35% to $2.49 million from a year-ago $3.84 million. It blamed lower sales on a cool spring, the National Hockey League lockout and the continuing price war in the industry. The Guelph, Ont.-based beer maker lost 50¢, or 3.57%, to close $13.50.

The junior S&P/TSX Venture composite index finished up 3.20, or 0.17%, to close 1,835.95.

In New York, higher oil prices sent markets lower overshadowing overall investor confidence in the economy’s health.

After rallying 104 points to an intra-day high of 10,719, the Dow Jones Industrial Average closed down 21.26 points at 10,594.

The tech-heavy Nasdaq composite index ended down 16.38 points at 2,157 and the S&P 500 index finished 2.25 points lower at 1,229.

Cisco Systems shares tumbled more than 6.8% after releasing a disappointing financial outlook.