Source: The Canadian Press

The Toronto stock market closed up sharply Wednesday as commodity prices stabilized and mining and energy stocks made big strides.

The S&P/TSX composite index rose 206.12 points to 13,465.75 with the materials, mining and energy sectors leading the way. Only the financial sector was lower.

The TSX Venture Exchange added 47.78 points to 2,250.5.

The Canadian dollar was up 0.23 of a cent at 100.47 cents US as the U.S. dollar weakened against other major currencies after the Federal Reserve announced Wednesday afternoon that it was still concerned about the U.S. economy and planned to hold the line on interests rates for some time to come.

Gold turned around morning losses, with the February bullion contract closing up 70 cents at $1,333 an ounce on the New York Mercantile Exchange. The March copper contract was up four cents at $4.26 a pound.

Oil was also higher, with the March crude contract up $1.14 at US$87.33 a barrel after falling more than 4% in less than a week on mixed economic news and the possibility of increased OPEC production.

The TSX energy index was up 2.37% with shares in Suncor Energy Inc. (TSX:SU) rising 4% or $1.49 to $39.10.

“Copper and crude oil have been stabilizing today,” said Colin Cieszynski, a market analyst at CMC Markets Canada, although he added that fears of further fiscal tightening in the next couple of weeks weighed on prices.

“Although there has been some weakness in precious metals … a successful Irish budget vote continued the recent trend of easing sovereign debt concerns, sparking a return of capital that had gone defensive last year back to Europe,” he wrote in a report Wednesday.

The materials index was the biggest gainer on the TSX, up 3.6% with shares of Goldcorp Inc. (TSX:G) up $1.66 at $47.59.

In corporate earnings, Canadian Pacific Railway Ltd. (TSX:CP) said Wednesday its net income was $186 million, or $1.09 per share, in the fourth quarter, up 27% from a year earlier and ahead of estimates of $1.08 per share. CP shares gained $1.51 to $67.84.

CGI Group Inc. (TSX:GIB.A) beat analyst estimates in the first quarter as its profits rose 14% to $126.6 million, or 45 cents per diluted share, on $1.12 billion in revenue. That was up 23% from a year earlier and CGI shares closed up 83 cents, or 5%, at $19.57.

Unusually heavy trading of Rutter Inc. shares (TSX:RUT) prompted the company to say Wednesday that it wouldn’t comment on speculation about its activities. At close, the shares were up 30% at 6.5 cents on volume of 4.2 million shares.

Wall street markets were little changed as investors largely shrugged of weak earnings reports. Instead, investors focused on the Fed announcement and on President Barack Obama’s call to overhaul corporate taxes.

The Dow Jones industrial average closed up 8.25 points at 11,985.44, after earlier moving above 12,000 for the first time since 2008. The last time it closed above 12,000 was June 19, 2008.

The Nasdaq gained 20.25 points to 2,739.50 and the S&P 500 was up 5.45 points at 1,296.63.

In an announcement Wednesday afternoon, the U.S. Federal Reserve kept the pace of its $600-billion bond buys steady, noting that unemployment in the U.S. is still high. It left interest rates unchanged and repeated its pledge to keep rates “exceptionally low” for “an extended period.”

The bond-buying program is intended to lower rates on loans and boost stock prices, spurring more spending and invigorating the economy. Fed chairman Ben Bernanke faces the challenge of trying to boost hiring and growth without creating new economic threats.

Meanwhile, traders welcomed Obama’s state of the union speech, particularly his proposal to cut corporate taxes and boost funding for education, innovation and infrastructure in the world’s largest economy.

Weaker earnings from Xerox Corp., Boeing Co., Eastman Kodak Co. and United Continental Holdings Inc. weighed on U.S. markets.

After markets closed Starbucks, Qualcomm and Netflix reported strong earnings for the latest quarter.

Traders also weighed a U.S. Commerce Department report that housing sales for all of 2010 dropped 14.4% from 2009. However, the year ended on a stronger note with December purchases rising by 17.5% compared with November.