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The Toronto stock market was well into positive territory late morning Tuesday as a strong U.S. retail sales number reinforced the view that the American economy continued to slowly recover.

The S&P/TSX composite index gained 52.67 points to 12,480.68 and the TSX Venture Exchange gained 1.96 points to 1,638.06.

The Canadian dollar rose 0.2 of a cent to 100.94 cents (U.S.).

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U.S. markets also advanced as retail sales ran ahead 1.1 per cent last month.

It was the biggest gain since September and the data provided evidence that a stronger job market is boosting the economy.

"The jobs picture is picking up, we had a good retail sales number, that's showing some confidence, that's important," said John Stephenson, portfolio manager at First Asset Funds Inc.

Auto sales were strong and department stores had their biggest gain in more than a year. Even without a 3.3 per cent rise in gasoline sales, retail sales would have increased a solid 0.8 per cent.

The Dow Jones industrial average gained 87.67 points to 13,047.28, the Nasdaq composite index was ahead 23.37 points to 3,007.03 and the S&P 500 index moved up 9.56 points to 1,380.65.

Traders also looked ahead to a mid-afternoon announcement by the U.S. Federal Reserve on interest rates.

The Fed is widely expected to leave interest rates unchanged. But investors will be closely monitoring the accompanying statement to see if U.S. rate-setters are a bit more confident about the state of the recovery following a run of upbeat economic data, particularly on the jobs front.

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The TSX base metals sector led advancers, up 1.6 per cent as May copper rose five cents to $3.89 (U.S.) a pound. Teck Resources (TSX:TCK.B) climbed 61 cents to $36.10 and HudBay Minerals (TSX:HBM) gained 22 cents to $11.71.

Tech stocks were also strong with Research In Motion Ltd. (TSX:RIM) ahead 18 cents to $13.23 while Celestica Inc. (TSX:CLS) was up 25 cents to $9.68.

The financial sector also provided lift, up 0.42 per cent as Manulife Financial (TSX:MFC) rose 21 cents to $12.48.

Oil prices gave up early gains with the April crude contract on the New York Mercantile Exchange down five cents to $106.29 (U.S.) a barrel. The energy sector was up 0.21 per cent and Suncor Energy (TSX:SU) improved by 34 cents to $33.53 and Canadian Natural Resources (TSX:CNQ) down 22 cents to $34.18.

The gold sector was down 0.26 per cent as bullion prices slipped $10.60 to $1,689.20 (U.S.) an ounce. Iamgold (TSX:IMG) gave back 13 cents to $13.83.

Telecoms were also weak with BCE Inc. (TSX:BCE) down 92 cents to $40.75.

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The tepid showing in Toronto followed a 76-point decline Monday and two straight weeks of declines. Some analysts feel that the TSX is ripe for some consolidation after rolling ahead steadily since early October with hardly a break. And they think that markets will need another catalyst to provide another leg up to the rally, likely in the form of a positive run of first quarter earnings reports.

"I don't see any reason to see the markets trade higher or frankly trade that much lower until you get another catalyst," added Stephenson.

In earnings news, Canadian media company and publisher Transcontinental Inc. (TSX:TCL.A) reported a $33.3-million loss, or 41 cents per share, compared to a profit of $25.7-million, or 32 cents per share, a year earlier. Adjusted net income was down six per cent to $27.1-million, or 33 cents per share, a penny lower than analyst expectations.

Revenues decreased four per cent to $495.9-million from $514.8-million.

Transcontinental also said it is raising its dividend by seven per cent to 14.5 cents and its shares added one cent to $12.89.

Shares in Alimentation Couche-Tard (TSX:ATD.B) gained 17 cents to $31.59 as the convenience store operator beat analyst forecasts. Net earnings soared nearly 25 per cent to $86.8-million (U.S.) in the third quarter of its fiscal year.

In other corporate news, shares in Valeant Pharmaceuticals International (TSX:VRX) were off 60 cents to $53.67 as it said it is expanding its presence in Eastern Europe by acquiring Austrian generic drug company Gerot Lannach's assets primarily in Russia for less than $185-million. Gerot Lannach's largest product is acetylsalicylic acid, a low dose aspirin. The company said total sales of these products was about $55-million last year, up more than 20 per cent from 2010.

Buyers were also encouraged by another sign that Europe's biggest economy will avoid slipping into a recession. A closely-watched survey shows that German investor confidence rose for the fourth month in a row to hit its highest level since mid-2010.

The ZEW institute's confidence index rose to 22.3 points in March from 5.4 in February. That was a better performance than the rise to around 12 that economists had expected.

European bourses were positive as London's FTSE 100 index gained 0.8 per cent, Frankfurt's DAX rose 1.04 per cent and the Paris CAC 40 climbed 1.14 per cent.

In Asia, South Korea's Kospi rose 1.1 per cent, Hong Kong's Hang Seng added one per cent, Australia's S&P/ASX 200 climbed 1.2 per cent and the Nikkei 225 index closed less than 0.1 per cent higher.

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