Toronto stocks remained firmly in positive territory on Tuesday on particular strength among energy stocks and materials companies.

The S&P/TSX composite index finished the day up 168.22 points, or 1.9%, at 8,961.55.

The heavyweight energy group gained 2.7%. This was supported by growth in oil futures after Saudi Arabia — the world’s biggest oil exporter — announced it would cut oil output to below its OPEC target in February, in an attempt to prevent further deterioration in prices. Crude oil for February delivery ended up 19¢, or 0.5%, at US$37.78 a barrel on the New York Mercantile Exchange.

Shares of Talisman Energy Inc. gained 3.3% to close at $12.34 after the company announced plans for $4 billion in capital spending in 2009, with a focus on projects of higher quality and less risk.

EnCana Corp. shares rose 2.2% to $56.08 and Husky Energy Inc. increased 4.5% to $33.03.

Petro-Canada shares enjoyed a 5.4% boost to $30.70.

The materials group moved higher by 3.9% as gold futures remained flat. Gold for February delivery ended down 30 cents, or 0.04%, at US$820.70 an ounce on the Comex division of the New York Mercantile Exchange.

The sub-gold index rose 4%.

Shares of Barrick Gold Corp. surged 5.2% to $39.98 and Goldcorp’s stock was up 3.6% to $31.49.

Shares of Yamana Gold Inc. rose after the Toronto gold miner said it expects to produce 1.3 million to 1.4 million gold equivalent ounces in 2009, and cut its dividend to 1¢ a share per quarter from 1¢ a month to conserve cash and help finance development and exploration projects. Its stock gained 2.5% to $7.95.

Also higher was Iamgold Corp., up a sharp 7.8% to $7.08.

Financial companies advanced 1.1% on Tuesday.

This included a boost of nearly 2% for shares of Bank of Montreal, after the company announced it is buying AIG Life Insurance Company of Canada for $375 million. BMO shares ended the day at $33.45, up 64 cents.

Shares of Power Financial Corp. rose 4.4% to $24.15 and National Bank of Canada’s stock increased 2.1% to $34.70.

The S&P/TSX Venture composite index failed to experience similar gains, dipping 9.45 points, or 1.1%, to close at 868.9.

The Canadian dollar continued its decent against its American counterpart, slipping US0.65¢ to US81.65¢.

Stocks south of the border were primarily ahead on Tuesday, having witnessed strength among energy and banking firms.

The Dow Jones industrial average, however, failed to hold on to gains. It fell 25.41 points, or 0.3%, to end at 8,448.56.

The S&P 500 index gained 1.53 points, or 0.2%, to end the day at 871.79.

The Nasdaq composite climbed 7.67 points, or 0.5%, to 1,546.46.

IE