Source: The Canadian Press

The Toronto stock market heaved itself to a triple-digit gain Thursday as a Greek bailout moved closer to fruition amid promises of massive spending cuts from Athens.

The S&P/TSX composite index added 123.43 points to close at 12,200.32, regaining a significant portion of the ground it lost in the previous two sessions after Greece’s debt was downgraded to junk status.

On Thursday, Greece’s defence minister promised “colossal” cuts in military operating costs to help the debt-ridden country emerge from its financial crisis, and the European Union said it expected to reach a bailout agreement with the International Monetary Fund and Greek officials within a few days.

Colin Cieszynski, market analyst at CMC Markets Canada, called Thursday’s gains “a relief rally.”

“Sovereign debt risks take over, the markets go down and then those get put aside for a little while and people focus on earnings and the markets go up again,” he said.

The Canadian dollar also received a boost as investors ventured out of the perceived safe haven of the American greenback, causing it to fall against other currencies. The loonie added 0.33 of a cent to 99.46 cents US.

The June crude contract on the New York Mercantile Exchange soared $1.95 to US$85.17 a barrel, sending the Toronto energy sector up 1.21%. Shares in Suncor Energy Inc. (TSX:SU) added 52 cents to C$34.09.

Gold, also considered a safe-haven investment, lost $3 to US$1,168.80 an ounce. Despite this, the gold sector added 0.8% amid some upbeat earnings.

Shares in Centerra Gold Inc. (TSX:CG) jumped 50 cents or 4.7% to C$11.09 after the company said it earned $122.1 million in its latest quarter as revenue more than doubled from a year ago.

And Goldcorp Inc. (TSX:G) stock edged up four cents to C$43.03 after the company reported adjusted earnings of $163.1 million.

Toronto’s base metals sector lost 1.29% as the May copper contract on the Nymex fell 3.5 cents to US$3.33 a pound.

Shares in Lundin Mining Corp. (TSX:LUN) slipped six cents to $4.94 even as the base metals miner reported a first-quarter profit of US$38 million, reversing a year-earlier loss of $8.6 million as metal prices doubled and it saw a solid contribution from its 25% stake in the Tenke Fungurume mine in the Democratic Republic of Congo.

The financial sector added 1.59% after Republicans abandoned their blockade against legislation that’s intended to clamp tough new controls on Wall Street, clearing an obstacle to the most sweeping rewrite of financial rules since the Great Depression. Shares in Royal Bank of Canada (TSX:RY) jumped $1.18 or 3% to C$62.39.

The TSX Venture Exchange slipped 0.38 of a point to 1,659.97.

New York markets also rose as investors redirected their attention from Greece’s troubles to signs of an improving economy, including an acquisition of smartphone maker Palm Inc. by Hewlett-Packard Co. and some more upbeat first-quarter earnings.

The Dow Jones industrial average rose 122.05 points to 11,167.32. The S&P 500 added 15.41 points to 1,206.77, while the Nasdaq gained 40.19 points to 2,511.92.

In earnings, Potash Corp. of Saskatchewan Inc. (TSX:POT) exceeded expectations with first-quarter earnings of US$449.2 million. The company said higher demand for its products in the quarter signals a longer-term rebound as farmers catch up on applications they missed last year because of high costs for fertilizer at a time when many faced low prices for their crops. Shares in Potash Corp. added $1.49 to $111.23.

Canadian Oil Sands Trust (TSX:COS.UN) units slipped four cents to $31.20 even though the trust said its first-quarter profits nearly quadrupled from a year ago to $167 million. Canadian Oil Sands holds the biggest stake in Syncrude Canada Ltd., the world’s largest oilsands project.

And Canada’s largest real-estate investment trust, RioCan (TSX:REI.UN), reaped a 22% increase in its first-quarter profit to $37.5 million as it took in more in rental payments from shopping centres in this country and the United States. RioCan units added 28 cents to $19.09.