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The Toronto stock market closed sharply higher Thursday as traders bought up stocks beaten down during a string of losses and hoped that Japan can get a grip on a nuclear crisis unfolding at a power plant heavily damaged in last Friday's earthquake and tsunami.

The S&P/TSX composite index ran ahead 221.33 points to 13,746.15 while the TSX Venture Exchange gained 57.98 points to 2,189.36.

The Canadian dollar was higher against the greenback, up 0.56 of a cent at $1.0139 (U.S.).

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Markets have closed lower all week amid fears of a possible meltdown of a nuclear reactor that was crippled when a 9-magnitude earthquake struck off Japan's northeastern coast last Friday.

In an encouraging development, crews were finishing laying a new cable to supply more reliable electricity to motors, valves and pumps needed to keep reactors cool at the Fukushima Dai-ichi nuclear complex.

At the same time, investors were trying to figure out what the disaster means for the Japanese economy and how it will affect the global recovery.

"You expect ultimately a rebuilding to take place in Japan while in the near term you have you clearly have some economic weakness because of the rationing of electricity and certain production facilities are out of order and so on," said Norman Raschkowan, North American strategist at Mackenzie Financial.

"But all of this assumes you don't have a major nuclear accident that essentially transforms a large area of land into uninhabitable land, which is what you had with Chornobyl. And I think that is what people have been wrestling with."

The April crude contract on the New York Mercantile Exchange gained $3.44 to $101.42 a barrel.

Oil prices had been trending lower on expectations that Japan, the world's third-biggest economy, will be using much less oil in the near future. But prices were higher Thursday as clashes between security forces — some brought in from Saudi Arabia and other Gulf states — and anti-government protesters in Bahrain.

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Saudi Arabia is the world's largest oil exporter and some analysts are worried that the unrest in Bahrain could spill over into that country.

The energy sector climbed 3.91 per cent and metals also headed higher with the May copper contract in New York ahead 15 cents at $4.34 a pound, sending the base metals sector up 3.87 per cent.

The gold sector was also higher as the April bullion contract rose $8.10 to $1,404.20 an ounce.

Japan's benchmark Nikkei 225 lost 1.4 per cent but that was a recovery from a 3.6 per cent drop at the open.

Better economic reports helped lift New York markets.

The Dow Jones industrial average jumped 161.29 points at 11,774.59.

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The Nasdaq composite index climbed 19.23 points to 2,636.05 while the S&P 500 index gained 16.84 points to 1,273.72.

A gauge of manufacturing in the mid-Atlantic region jumped in February to the highest point since January 1984. The survey from the Federal Reserve's Philadelphia branch showed new orders soared.

The Fed also said that production at U.S. factories, mines and utilities dipped last month but was actually higher in previous months than first estimated.

In Canada, wholesale trade put in a strong showing in January with sales up 1.5 per cent, much higher than expectations for a 0.6 per cent advance. Statistics Canada said autos were a key component, with sales up 1.6 per cent in real terms.

Krishen Rangasamy, an economist at CIBC World Markets, said the showing means the economy is on track for strong first-quarter economic growth, which supports the case for a May rate hike by the Bank of Canada.

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