Source: The Canadian Press

The Toronto stock market advanced Monday on rising investor hopes that the U.S. Federal Reserve will take further steps to stimulate the flagging U.S. economic revival.

The S&P/TSX composite index moved up 63.59 points to 11,863.56. The index also got a push upwards from Research In Motion Ltd. on word the BlackBerry maker could have a deal in the works that would satisfy the security concerns of the Saudi Arabian government.

The TSX Venture Exchange was ahead 3.55 points at 1,469.03. The Canadian dollar rose 0.11 of a cent to 97.4 cents US.

The Fed started its scheduled two-day meeting on interest rates Monday. The U.S. central bank will likely keep interest rates at historic lows when it makes its decision public at mid-afternoon Tuesday. But there are hopes that last Friday’s weak employment report for July could persuade it to restart some stimulus programs.

Recent economic reports have shown that the recovery is slowing. And Fed chairman Ben Bernanke said just a few weeks ago that the forecast for the economy remains “unusually uncertain.”

The tone of Bernanke’s commentary to Congress and “really unimpressive job numbers” are reinforcing a feeling that stimulus will again be forthcoming, said Gavin Graham, global strategist at Excel Funds Management.

“You have done the biggest quantitative easing, the biggest dump of money into the market, and all you get is one year of three per cent-ish growth — and then if the stimulus is removed, whoops, we go back into recession again,” Graham said.

The Fed let many programs expire this year, such as purchasing mortgage-backed securities, as it appeared the recovery was gaining steam. But it may hint Tuesday that it is ready to start new programs to encourage lending even if it doesn’t implement them immediately.

The TSX tech sector was the biggest percentage gainer, ahead 1.3%. Research in Motion (TSX:RIM) was up $1.87 or 3.4% at $56.80 following reports that the maker of the BlackBerry has reached a preliminary agreement with Saudi Arabia that would allow the government some access to user data. Under the reported terms, which have not been confirmed by the company, RIM would place one or more local servers within Saudi Arabia.

Several countries, including the United Arab Emirates, Indonesia, India, Lebanon and Algeria, have all expressed concern recently over their inability to monitor BlackBerry traffic. The uncertainty drove RIM’s stock price down about 7% last week.

TSX strength also came from the base metals sector, up 1.22% as the September copper contract on the New York Mercantile Exchange was ahead a penny at US$3.36 a pound. Quadra FNX Mining (TSX:QUX) added 16 cents to C$12.81.

A strike halted production at Teck Resources’ (TSX:TCK.B) Coal Mountain mine in southeastern British Columbia over the weekend. Coal Mountain, which is expected to produce more than 10% of Teck’s coal output this year, produces both metallurgical coal used in steel making and thermal coal used for power generation. Teck shares were ahead 71 cents at $36.30.

Shares in Uranium One (TSE:UUU) climbed 30 cents to $3.14. The miner increased its 2010 production guidance after record production at its South Inkai mine in Kazakhstan dramatically reduced its adjusted net loss in the second quarter. Its loss came in at US$1.3 million, down from $12.9 million a year ago.

The telecom sector also lifted the TSX, up almost 1% with Telus Corp. (TSX:T) ahead 81 cents at $42.01.

The TSX energy sector rose 0.57% as the September crude contract on the Nymex advanced 78 cents to US$81.48 a barrel. Canadian Natural Resources (TSX:CNQ) climbed 41 cents to C$36.85.

Financials were also mainly positive with Royal Bank (TSX:RY) ahead 47 cents at $53.45.

Manulife Financial (TSX:MFC) ended two days of steep losses that followed a surprise announcement of a $2.4-billion quarterly loss which sent the insurer’s stock tumbling 14%. On Monday, MFC shares rose 24 cents, or 1.7%, to $14.27.

The gold sector was little changed as December bullion in New York shed early gains to decline $2.70 to US$1,202.60 an ounce. Goldcorp Inc. (TSX:G) declined 31 cents to C$41.30.

New York’s Dow Jones industrials finished 45.19 points higher to 10,698.75.

The Nasdaq rose 17.22 points to 2,305.69 and the S&P 500 index climbed 6.15 points to 1,127.79.

In other corporate news, Arkansas-based Simmons Pet Food Inc. has agreed to pay $239 million to acquire Menu Foods Income Fund (TSX:MEW.UN), a Toronto-area company involved in a massive recall of pet food three years ago. Menu Foods units soared $1.45, or 44.34%, to $4.72.

Skype SA, the Internet calling service that was controlled until last year by eBay Inc., filed Monday for a U.S. initial public offering. Luxembourg-based Skype tentatively put the value of the offering at US$100 million, but that’s a rough estimate only used as a basis for the filing fee for the Securities and Exchange Commission. Skype did not say when its shares would go on sale, or at what price.