Source: The Canadian Press

The Toronto stock market closed higher Monday as falling commodity prices were offset by gains in the financial sector.

The S&P/TSX composite index added 32.31 points to 12,102.97.

The financial sector added 0.85%, more than compensating for the losses seen Friday after investment banking giant Goldman Sachs was charged for its dealings in the subprime mortgage market.

John Stephenson, portfolio manager at First Asset Investment Management, said the stock market appeared to be treating Goldman’s problems as a “one off.”

And unexpectedly strong results from Citigroup indicate the U.S. financial sector may be improving faster than expected.

“People are looking at Citigroup’s earnings appearing to be healthy, another indicator that we’ve turned the corner towards better times,” Stephenson said.

“I think the market is oscillating between concern over the future regulatory environment and fallout from that, and then offset by what’s been a pretty solid set of earnings.”

However, lower commodity prices moderated the financial sector’s gains on the TSX. The price of oil fell on fears that disruption to air travel resulting from last week’s volcanic eruption on Iceland will hurt demand for jet fuel.

The May crude contract on the New York Mercantile Exchange lost $1.79 to US$81.45 a barrel, while the June contract fell $1.54 to $83.13 a barrel. The TSX energy sector lost 0.06% as shares in Encana Corp. (TSX:ECA) slipped four cents to C$31.43.

The June bullion contract on the Nymex lost $1.10 to US$1,135.80 an ounce. Goldcorp Inc. (TSX:G) was flat at C$39.44 and Barrick Gold Corp. (TSX:ABX) was up 11 cents at $39.76.

And shares in the base metals sector lost 0.22% as the price of copper fell 1.75 cents to US$3.50 per pound.

The Canadian dollar slipped 0.16 cent to 98.54 cents US. The TSX Venture Exchange lost 12.88 points to 1,653.96.

In New York, the Dow Jones industrials added 73.39 points to 11,092.05, the Nasdaq slipped 1.15 points to 2,480.11 and the S&P 500 edged up 5.39 points to 1,197.52.

Shares in Citigroup Inc. (NYSE:C) added 32 cents or more than 7% to US$4.88 after it reported a surprise first-quarter profit of US$4.4 billion, after dividend payments, as trading revenue offset losses from failed loans.

Toyota Motor Corp. (NYSE:TM) stock fell 31 cents to US$79.06 after the troubled automaker agreed to pay a record US$16.4-million fine for failing to properly notify federal authorities about a dangerous accelerator pedal defect. The auto company said it had agreed to settle the civil penalty, but denied the government’s allegation that it violated the law.

In Canadian corporate news, CAE Inc. (TSX:CAE) has acquired The Datamine Group, a U.K.-based global supplier of software and services for the mining sector, for an undisclosed price. Shares of CAE fell 17 cents to C$9.75.

TD Bank (TSX:TD) announced Friday it has acquired three insolvent Florida banks seized by U.S. regulators for an undisclosed price. The bank’s stock gained 84 cents to $76.97.

And shares in Canfor Corp. (TSX:CFP) added 24 cents or 2.42% to $10.14 as lumber prices rose to their highest level in three years amid tight supplies and high demand.