North American markets rallied Monday after a report on U.S. manufacturing activity came in stronger than expected. The S&P/TSX composite index was up 70.77 points to close at 7,843.47.

The U.S. Institute for Supply Management said production and new orders surged to multi-year highs in October.

On the TSX, the gains were led by a 2.7% rise in the information technology sector. Nortel rose 16¢ to $6.04; ATI Technologies climbed $1.08 to $19.96.

Every sector advanced, except for the golds. The gold sector stumbled badly as the price of bullion slumped on news of the good U.S. economic data, which boosted the U.S. dollar in foreign markets.

The TSX gold index fell 1.8%. Bema Gold dropped 25¢ to $3.91; Placer Dome dropped 30¢ to $20.05.

Cara Operations shares gained 4¢ to $7.75. The company scheduled a Dec. 15 special meeting for shareholders to vote on a proposal to take the firm private at $7.50 a share in cash.

Inco rose 64¢ to $44.48.

Canada banks, scheduled to start reporting quarterly results at the end of November, finished with a second straight day of share-price gains.

Bank of Montreal added a gain of 78¢ to $50.11, while Royal Bank of Canada (rose 69¢ to $64.17.

Market momentum on the TSX was positive as 695 issues advanced and 552 declined, while a 257 million shares changed hands.

On Wall Street, the Dow Jones industrial average rose 57.34 points to 9,858.46. The tech-heavy Nasdaq composite index gained 35.50 points to 1967.70. The broader S&P 500 closed up 8.31 points at 1,059.02.

The Canadian dollar, reflecting the strength in the U.S. dollar, fell 0.82¢ of a cent to US75.02¢.