TSX surges on manufacturing data

The Toronto stock market surged to a triple-digit gain Tuesday as shares rose in the wake of strong manufacturing data and a spike in oil prices.

The S&P/TSX composite index surged 253.34 points, or 2.1 per cent, to close at 12,208.43.

In New York, the Dow Jones industrial average jumped 179.75 points, or 1.5 per cent,to 12,397.31

Separate surveys showed manufacturing in the U.S., India, China and Australia improved in December.

The Canadian dollar gained 0.58 of a cent from Friday's Bank of Canada close to 98.91 cents US.

The U.S. Institute for Supply Management said its survey for last month showed the manufacturing index expanding more than expected, coming in at 53.9, better than the expected reading of 53 and higher than the 52.7 reading registered in November.

The ISMs employment sub-index made strong gainsrising to 55.1 from 51.8something TD Bank senior economist James Marple said was "a good harbinger of an improvement in manufacturings contribution to job growth ahead of the (U.S. jobs) report on Friday. Statistics Canada will also issue its jobs report for December on Friday.

Chinese manufacturing also picks up

Traders were also relieved to see China's main manufacturing index showed expansion, coming in at 50.3 on manufacturing and jumping to 56 on services.

But some traders were skeptical that the economic data signals a positive turning point for the global economy.

"It's all good news," said John Stephenson, portfolio manager at First Asset Funds Inc.

"But am I betting this is part of a long-term trend? No. The only thing you can say that's positive is at least what ails the world is somewhat known and therefore the surprises this year should be relatively less than the surprises last year."

Worries about a slowing global economy and a worsening eurozone government debt crisispushed the TSX down 11 per cent last year.

Oil prices jumped by more than four dollars USafter Iran test-fired a surface-to-surface cruise missile Monday, part of 10-day naval manoeuvres scheduled to end Tuesday.

Iran has threatened to close the Strait of Hormuz, where one-sixth of global crude exports pass, as possible retaliation to new U.S. economic sanctions over Iran's nuclear program.

February crude closed up $4.13 at $102.96US a barrel, sending the TSX energy sector up 3.26 per cent.