Source: The Canadian Press

The Toronto stock market ran ahead to its first positive close of 2011 on Tuesday as commodity stocks benefited from a solid earnings report from resource bellwether Alcoa Inc.

The S&P/TSX composite index gained 155.93 points to 13,401.05 after five straight losing sessions as sentiment was also improved by a pledge from Japan to support Europe’s bailout efforts.

The Canadian dollar made headway amid rising prices for oil and metals, up 0.36 of a cent at 101.04 cents US.

The TSX Venture Exchange was 32.34 points higher at 2,265.74.

Markets have been rattled by reports that Portugal was being pressured by France and Germany to accept a bailout.

Japan pledged Tuesday to fund about a fifth of the European bailout fund’s next bond issue, which is estimated at about five billion euros (US$6.5 billion). The cash will be used to finance Ireland’s rescue and Japan’s move helped ease tensions across markets on Tuesday.

Analysts say Japan and China, which both have large cash reserves, are likely interested in the higher yields in Europe as well as in stabilizing world markets among key trading partners. China, which has been criticized internationally for keeping its own currency low to gain trade advantage, may also be trying to garner political goodwill.

“The fact that China has said they have been participating and supporting the market for the Greek bonds and the Portuguese bonds shows that China also is taking more of a global leadership role,” observed Norman Raschkowan, North American strategist at Mackenzie Financial Corp.

Meanwhile, Alcoa Inc. reported net income of US$258 million, or 21 cents a share, for the October-December quarter, which was two cents better than analysts had forecast. The aluminum giant expects business will continue to improve, forecasting a 12% increase in global aluminum demand this year.

“Aluminum has been one of the laggards in terms of the industrial metals and it was a very encouraging report which reinforces the positive outlook for materials,” added Raschkowan.

“Aluminum is used not only in industrial manufacturing, but also in a lot of consumer related products, which gives you a broader sense of how things are going.”

Alcoa shares were down about 1% at US$16.33 but the stock had run up about 7% in the first week of 2011 trading.

The strong Alcoa report helped send the TSX base metals sector up 3% as the March copper contract on the New York Mercantile Exchange climbed eight cents to US$4.35 a pound. Teck Resources (TSX:TCK.B) gained $2.61 to C$63.11.

Taseko Mines (TSX:TKO) ran ahead 87 cents or 17.4% to $5.87 after it said that its Gibraltar mine in British Columbia produced more than 90 million pounds of copper in 2010 and that it expects production to increase in 2011 once a bottleneck in the ore feed system is cleared.

The energy sector rose just shy of 2% as the February crude contract on the New York Mercantile Exchange ran ahead $1.86 to US$91.11 a barrel.

Oil has risen sharply over the last two trading days after the 1,300-kilometre trans-Alaska pipeline, which normally carries more than 600,000 barrels a day, was shut Saturday after a leak was discovered at a North Slope pump station. Oil production on the North Slope has been cut by 95%.

Canadian Natural Resources (TSX:CNQ) gained 90 cents to C$42.50 and Cenovus Energy (TSX:CVE) gained 44 cents to $32.39.

Talisman Energy Inc. (TSX:TLM) said it expects full-year exploration and development spending to remain steady at about US$4 billion for 2011. The Calgary-based energy producer also says it estimates that production will grow five to 10% for the year and its shares headed 70 cents higher at $22.90.

Gold stocks were also stronger as the February bullion contract in New York rose climbed $10.20 to US$1,384.30 an ounce. Goldcorp Inc. (TSX:G) advanced 70 cents to C$43.36 while Barrick Gold Corp. (TSX:ABX) improved by 72 cents to $49.44.

All sectors contributed to the rise on the TSX with the industrials sector up 1.35%. Bombardier Inc. (TSX:BBD.B) was up 18 cents at $5.42.

The financials group was ahead 0.63%. Royal Bank (TSX:RY) climbed 87 cents to $52.56.

Bank of Montreal (TSX:BMO) shares rose 25 cents to $58.33 as it signed a definitive agreement to buy Hong Kong-based Lloyd George Management for an undisclosed amount. The bank said the investment manager has about US$6 billion in assets under management.

Traders also took in data showing slowing activity in the Canadian housing sector. Canada Mortgage and Housing Corp. reported that the seasonally adjusted annual rate of housing starts was 171,500 units in December, down from 198,200 units in November.

CMHC said the drop was due to the multiple starts segment, especially in Ontario.

The Dow Jones industrials moved up 34.43 points at 11,671.88.

The Nasdaq composite index gained 9.03 points to 2,716.83 while the S&P 500 index was ahead 4.73 points at 1,274.48.

In other corporate news, Corus Entertainment Inc. (TSX:CJR.B) reported Tuesday that first-quarter revenue increased by 8% over last year to $240.6 million, with both its television and radio operations contributing to the growth. Net income was $46.2 million or 56 cents per share on a diluted basis, which was in line with analyst estimates, down from $73.9 million a year ago. Corus shares gained 83 cents to $23.49.

Indonesia says BlackBerry maker Research In Motion Ltd. (TSX:RIM) has agreed to filter out pornographic content on its smartphones in the world’s most populous Muslim country. It said Tuesday that RIM is also ready to set up a server in Indonesia. The country had threatened to revoke BlackBerry’s licence to operate unless it filtered out porn and set up a local server. RIM shares added 38 cents to $62.15.