The Canadian Press

The Toronto stock market closed higher for a second session Tuesday amid more encouraging news on the American economy.

The S&P/TSX composite index advanced 90.79 points to 11,408.34 after the number of Americans preparing to buy a home rose slightly in December, a sign sales could be stabilizing heading into the spring home-buying season.

The U.S. National Association of Realtors, a trade group, said its index of sale contracts rose 1% in December.

The news followed a better-than-expected survey of the American manufacturing sector by the Institute for Supply Management on Monday, which send the TSX up more than 200 points.

The news over the past couple of days was reassuring to investors who watched the TSX lose 5.5% during January on worries about the strength of an economic recovery.

But analysts warned there is still plenty of nervousness about later this year.

“I think that we’re approaching a critical juncture where the stimulus led recovery is real but we know that as we get into the heart of 2010, when the bulk of fiscal stimulus has been spent, then that will be the real test,” said Paul Taylor, chief investment officer at BMO Harris Private Banking.

“The markets are going to be choppy through the next couple of quarters.”

The Canadian dollar moved up 0.38 of a cent to US94.51¢ as federal Finance Minister Jim Flaherty says there is no need for Ottawa to provide more stimulus spending for the economy beyond the end of the current program, which expires in 2011.

Flaherty also said he will unveil his plans for eliminating the deficit, which is expected to hit a record $56 billion in the current fiscal year, in the upcoming March 4 budget.

On the TSX, the tech sector was the biggest gainer, up 2.47% with Emergis Inc. (TSX:EME) up 23¢ to $3.03 while Research In Motion Ltd. (TSX:RIM) climbed $1.49 to $69.55.

The industrials sector ran up 2.14% as Bombardier Inc. (TSX:BBD.B) gained 32¢ or 6.2% to $5.49 and Canadian Pacific Railway (TSX:CP) climbed 63¢ to $51.66.

The base metals sector was ahead 1.5% as the March copper contract was ahead half a cent at US$3.09 a pound. Teck Resources (TSX:TCK.B) gained $1 to US$37.70 and Equinox Minerals (TSX:EQN) was up 20¢ to $3.72.

The financial sector was ahead 1.13% with Royal Bank (TSX:RY) up 98¢ to $53.80 and Scotiabank (TSX:BNS) gained 65¢ to $45.84.

The energy sector was ahead a slight 0.09% even as the March crude contract on the New York Mercantile Exchange climbed $2.80 to US$77.23 a barrel.

The group was weighed down by Suncor Energy Inc. (TSX:SU), which reported fourth quarter 2009 net earnings of $457 million, or 29¢ per share. The results missed analyst estimates of 42¢ a share. Suncor shares fell $1.99 to C$32.85.

Bullion prices also made headway with the April gold contract on the Nymex up $13 to US$1,118 an ounce. The gold sector turned up 0.1%, but Barrick Gold Corp. (TSX:ABX) faded 50¢ to C$38.30.

The TSX Venture Exchange moved 7.13 points higher to 1,517.07.

New York’s Dow Jones industrials gained 111.32 points to 10,296.85 while the Nasdaq composite index rose 18.86 points to 2,190.06 and the S&P 500 index moved up 14.13 points to 1,103.32.

Investors are cautious ahead of the release of the January U.S. jobs report on Friday. Weekly jobless insurance claims have risen for the last three weeks. Investors have been expecting a slight gain in job growth.

In other earnings, shipping giant UPS says a strong holiday shipping season and solid international business propelled it to a fourth-quarter profit of US$757 million or 75¢ a share, triple what it was a year ago. Its shares rose 23¢ to US$58.62.

Shares in Saputo Inc. (TSX:SAP) were ahead 75¢ to $29.75 after Canada’s largest cheese maker had a $104.3-million profit in its latest quarter, an 80% increase over the year-earlier period.

Ford Motor Co. shares gained 27¢ to US$11.39 as U.S. sales rose 25% in January, buoyed by a stronger economy and Toyota Motor Corp.’s decision to halt U.S. sales of eight popular models because of faulty gas pedal systems.

Shares in Toyota fell $1.88 to US$78.06 in New York as its January U.S. sales slumped 15.8%.

Rogers Communications (TSX:RCI.B) slipped 13¢ to $33.43 after Goldman Sachs Group Inc. added the company to its “conviction sell” list on expectation the company’s growth will slow “for the foreseeable future.”