Toronto’s stocks closed higher on Monday as investors got excited about the takeover of Clarica by Sun Life. The multibillion dollar bid and growing hopes of an economic recovery next year combined to lift prices.

The TSE 300 index closed up 89.72 points, or 1.21%, at 7,515.40 points. Volume was strong with 152.8 million shares changing hands.

Overall, 11 of the TSE 300’s 14 subindexes closed higher as the financial services group, up 2.1%, led all sectors as Sun Life Financial Services of Canada Inc. said it would take over Clarica Life Insurance Co.

Sun Life said it would pay $7.3 billion for Clarica, forming the country’s largest insurance company and providing a base for international expansion.

Shares of Clarica were up $1.10, or 2.1%, at $52.05, while Sun Life shed $1.17, or3.3%, to $33.60.

The industrial products sector also posted a 1.2% gain as Open Text Corp. offered $68.5 million for all the outstanding shares of business software provider Accelio Corp.

Open Text gained 52 cents, or 1%, to $48.07, while Accelio closed up 70 cents, or32%, to $2.85.

Bellwether Nortel Networks Corp. was the biggest mover today and was up 21 cents, or 1.8%, at $11.71.

Volume on the CDNX was steady at 38.5 million shares. Decliners out did advancers by 241 to 216.

The Dow Jones industrial average climbed 85.25 points, or 0.87%, to 9,895.43, according to the latest data, while the Nasdaq composite rose 34.32 points, or 1.76%, to 1,987.49. The benchmark Standard & Poor’s 500 added 11.21 points, or 1%, to 1,134.30.

It was the market’s best day in nearly two weeks.