Strength in bank stocks pulled the benchmark index of the Toronto Stock Exchange higher for a second day on Tuesday, after major American bank Goldman Sachs Group Inc. reported second-quarter earnings that far exceeded expectations.

The S&P/TSX composite index rose 94.22 points, or 1%, to close at 9,986.15.

The financials group gained 2% after Goldman Sachs reported net income of US$3.44 billion in the second quarter ended June 26.

On the TSX, Royal Bank of Canada advanced $1.36, or 2.9%, to $47.86 and Bank of Montreal gained 2.6% to $48.10.

CIBC’s stock added $1.53, or 2.6%, to finish at $60.02.

Also higher was Manulife Financial Corp., up 2% to $20.43, and National Bank of Canada, up 2.1% to $54.88.

Meanwhile, oil futures finished at a two-month low on Tuesday after the Organization of Petroleum Exporting Countries predicted in its monthly report that global oil demand will fall by 1.6 million barrels a day this year from a year ago. August crude futures fell 17 cents, or 0.3%, to end at US$59.52 a barrel on the New York Mercantile Exchange.

Despite the drop in oil futures, the energy group gained 0.8% on Tuesday.

Higher for the day was Talisman Energy Inc., up 1.3% to $15.89, and Bonavista Energy Trust, up 2.4% to $17.47.

Shares of Crescent Point Energy Corp. jumped $1.30, or 4.1%, to close at $33.10.

Materials stocks rose 0.7% on Tuesday as gold futures climbed higher. Gold for August delivery edged up 30 cents to US$922.80 an ounce on the Comex division of the New York Mercantile Exchange.

The sub-gold index rose 0.6%.

Shares of First Quantum Minerals Ltd. gained 3% to $54.48 and Barrick Gold Corp. rose 1.4% to $37.38.

Eldorado Gold Corp.’s stock surged 3.3% after it announced that it had agreed to acquire 57.9 million shares of Sino Gold Mining Ltd., an Australian company, in exchange for 27.8 million of its shares. Eldorado’s stock closed at $9.94.

Shares of Potash Corp. tumbled $2.53, or 2.6%, to $95.52 on concern that fertilizer prices will decline.

Junior stocks also advanced, sending the S&P/TSX Venture composite index up 7.76 points, or 0.7%, to 1,055.39.

The Canadian dollar surged US1.21¢ on Tuesday, to close at US88.03¢.

Stocks in the United States finished in positive territory, but failed to register significant gains despite Goldman Sachs’ strong earnings and news that retail sales rose in June.

The Dow Jones industrial average gained 27.81 points, or 0.3%, to end at 8,359.49.

The S&P 500 index rose 4.79 points, or 0.5%, to end at 905.84.

The Nasdaq composite index gained 6.52 points, or 0.4%, to 1,799.73.

IE