The Canadian Press

The Toronto stock market closed at its highest level of the year Tuesday amid higher energy stocks and a solid earnings report from grocery chain Loblaw Companies Ltd. (TSX:L).

The S&P/TSX composite index moved ahead 117.74 points to 11,630, about 44 points higher than the previous closing high for 2009 reached in mid-September, with all sectors positive save for a dip in the base metals sector.

The positive showing in Toronto followed a 105-point advance Monday and a 1.39% gain last week.

Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier, said there are good reasons why the TSX is up more than 52% since the lows of early March.

“The basic message is that interest rates will stay low, and people who buy GICs and keep their money in chequing accounts are not going to be rewarded with very much in the way of interest income,” he said, “so that’s why money is going into various other asset classes, including housing and equities.”

The Canadian dollar moved down 0.36 of a cent to US95.14¢.

Earnings news from Loblaw helped send the consumer staples sector up 1.32%.

Its shares moved up $1.50 or 4.93% to $31.90 after the company reported quarterly net income of $189 million or 69¢ per share, up from year-ago profit of $157 million or 57¢ per share. The grocer also said that revenues totalled $9.47 billion for the quarter, down slightly from $9.49 billion last year.

Shares in rival grocery chain Metro Inc. (TSX:MRU.A) gained $1.54 to $36.10.

The energy sector was up 0.94% as the December crude contract on the New York Mercantile Exchange gained 24¢ to US$79.14 a barrel. Suncor Energy (TSX:SU) advanced 84¢ to C$38.88.

The financial sector rose 0.83% with CIBC (TSX:CM) ahead $1.08 to $66.93.

The investment and corporate banking arm of BMO Financial Group (TSX:BMO) said Monday it has signed a deal with U.S. hedge fund Paloma Securities to acquire the company’s global securities lending business. Financial details weren’t disclosed and BMO shares were up $1.36 at $52.95.

Railway stocks helped push the industrials sector ahead 0.74%, with Canadian National Railways (TSX:CNR) up 80¢ to $57.90.

CAE (TSX:CAE) shares rose 17¢ to $8.86 as it announced the sale of two ARJ21 flight simulators worth $35 million to COMAC Shanghai Aircraft Customer Service Co.

The gold sector improved by 0.83% as the December gold contract on the Nymex marginally improved on Monday’s latest record close, up 20¢ to US$1,139.40 an ounce. Barrick Gold Corp. (TSX:ABX) gained $1.33 to $47.48.

The base metals sector was 0.48% higher with December copper in New York up half a cent at US$3.11 a pound after running up 13¢ Monday. Teck Resources (TSX:TCK.B) gained 93¢ to $35.89.

The TSX Venture Exchange rose 8.1 points to 1,386.04.

New York indexes closed slightly higher despite disappointing reports about retailers and manufacturing.

The Dow Jones industrials closed up 30.46 points to 10,437.42, while the Nasdaq composite index was ahead 5.93 points to 2,203.78 and the S&P 500 index gained 1.01 points to 1,110.31.

Investors examined earnings from large U.S. retailers, looking for signs of strength from consumers. Consumer spending accounts for about 70% of all U.S. economic activity and a return of shoppers — especially during the holiday season — is considered necessary for a strong economic recovery.

Home Depot Inc. said earnings and sales fell during the most recent quarter but beat analysts’ expectations. The largest home improvement retailer in the U.S. also said it is seeing signs of stabilization in the housing market, which has been hammered in recent years. Its shares fell 66¢ to US$26.99.

Saks Inc. and Target Corp. also reported better-than-expected third-quarter results Tuesday morning, but say they remain cautious of a potential rebound ahead of the key upcoming holiday season.

“Despite the dramatic rally in the stock market, we still see the consumer operating at recessionary levels,” said Uri Landesman, chief equity strategist and senior portfolio manager at ING Investment Management in New York.

On the economic front, a report on industrial production disappointed the market. The Fed said production at U.S. factories, mines and utilities rose 0.1% in October, less than the 0.4% predicted by economists polled by Thomson Reuters.

U.S. wholesale prices rose less than expected in October as the weak economy keeps inflationary pressures largely in check. The Labour Department said Tuesday that its producer price index rose 0.3% last month, after falling 0.6% in September. Analysts had expected a 0.5% gain.

@page_break@In other corporate news, shares in steel processor Royal Laser Corp. (TSX:RLC) surged 5.5¢ or 24.44% to 28¢ after it said Tuesday it has received an unsolicited takeover offer from an unnamed company.

Royal Laser services, processes and distributes flat-rolled steel for the automotive industry. It also fabricates products for the industrial, environmental and construction industries.

Kingsway Financial Services Inc. (TSX:KFS) shares fell $1.24 or 42.18% to $1.70 after it said Monday that the Pennsylvania Department of Insurance wants to unwind a donation by the company of its indirect interest in Lincoln General Insurance Co. to a charity.

Last month, Kingsway, which has endured several quarters of poor financial results as well as a revolt by dissident shareholders, said the donation will also help it meet regulatory and contractual obligations, including servicing a US$10-million surplus note facility agreement.