The Toronto stock market registered a solid advance as resource stocks rebounded Tuesday morning after a string of losses amid global economic uncertainty.The S&P/TSX composite index jumped 116.89 points to 11,452.67 while the TSX Venture Exchange gained 10.77 points to 1,289.31.The Canadian dollar gave up early gains to dip 0.03 of a cent to 96.15 cents US as the Bank of Canada said that it was leaving its key interest rate unchanged at one per cent because of a worsening economic environment. It also kept the door open for future rate hikes.In its accompanying statement, Canada’s central bank said “to the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.”New York markets were slightly higher. The Dow Jones industrial average was up 4.69 points to 12,106.15. The Nasdaq composite index added 8.2 points to 2,768.21 and the S&P 500 index was up 3.44 points to 1,281.62.The gains in New York came as the latest reading on the U.S. services sector showed continued expansion. The Institute for Supply Management’s index came in at 53.7, up from 53.5 in April.Finance ministers and central bank governors from seven of the world’s main economies are grappling with Europe’s shaky economic situation and were to hold a conference call Tuesday to discuss a response. The G7 teleconference was being held as Spain’s banking crisis continued to cast a shadow over trading.The country’s banks are weighed by toxic loans following the implosion of the country’s real estate sector in the wake of the 2008 financial collapse. Those banks may force the country to seek a bailout. Spain, strapped for cash, might have to tap European Union rescue funds, but it is reluctant to do so because such aid would come with strict conditions.Spain has been forced to pay ever higher amounts of interest to attract buyers for its debt with the yield on the country’s 10-year bond up 0.02 of a point to 6.42 per cent. Spanish Treasury Minister Cristobal Montoro said Tuesday said that, given current borrowing costs, financial markets had effectively shut out the country.He also claimed the amount of money needed to prop up Spain’s troubled banking sector is not excessively high but said the question was where the money would come from. And he repeated the country’s calls for the European Union to move faster towards establishing a banking union that would allow ailing lenders to seek help without governments intervening. Banca Santander S.A. chief Emilo Botin’s estimate that Spain’s banks would need C40 billion to shore up their defences.Canada’s finance minister, Jim Flaherty, has said European Union governments have significant resources and should be able to handle the eurozone’s problems without outside financial assistance from other countries.However, Flaherty said Monday that he was concerned about the European situation and said Ottawa was prepared to take measures to cushion Canada’s economy if the situation arises, much as it did during the 2008-9 recession.“One of the real issues that investors are wrestling with is that people have lost confidence in the ability of the Europeans to deal with the problem (of recapitalizing their banking system),” said Norman Raschkowan, North American strategist for Mackenzie Financial Corp., adding the problems in the banking sector don’t end at the Spanish border.“The Italian banks are stretched and the French banks are stretched. I think unfortunately the Europeans still haven’t come to that basic appreciation of how critical the capitalization of the banks is for confidence.”The energy sector was up 1.8 per cent as oil oscillated between slight gains and losses during the session. At late morning, the July crude contract on the New York Mercantile Exchange was off a dime to US$83.88 a barrel. Suncor Energy (TSX:SU) ahead 44 cents to $28.15 while Cenovus Energy (TSX:CVE) advanced 35 cents to $30.87.The base metals sector was ahead 1.15 per cent while copper prices dipped a penny at US$3.30 a pound. Teck Resources (TSX:TCK.B) climbed 77 cents to $31.26 and Ivanhoe Mines (TSX:IVN) climbed 23 cents to $9.91.The resource sectors have racked up the steepest losses on the TSX, which is down more than 11 per cent from its 2012 highs from late February.The financial sector was up one per cent with TD Bank (TSX:TD) ahead $1.13 to $77.63.Utilities were also higher as TransCanada Corp. (TSX:TRP) said it has been chosen by Shell Canada Ltd. to build, own and operate a $4-billion natural gas pipeline in British Columbia. The Calgary-based company said the pipeline will transport natural gas from the Montney region in eastern British Columbia to a liquefied natural gas export facility near Kitimat, B.C. Its shares gained 40 cents to $42.55.The gold sector was ahead 0.3 per cent as bullion prices improved, up $6.80 to US$1,620.70 an ounce. Iamgold Corp. (TSX:IMG) gained 25 cents to $12.39.In Europe, London markets were closed as part of the Diamond Jubilee holiday while bourses on the continent were mixed as a European business survey sounded a dismal note Tuesday. Markit’s Purchasing Managers’ Index for the eurozone hit a near-three-year low in May.Even Germany was below the 50 mark, which indicates a contraction. Frankfurt’s DAX declined 0.33 per cent while the Paris CAC 40 gained 1.28 per cent.In other corporate news, Westport Innovations Inc. (TSX:WPT) has teamed up with global giant Caterpillar Inc. to co-develop natural gas technology to fuel off-road heavy equipment that typically use diesel. Caterpillar will fund the development program and Westport, a Vancouver-based specialist in engine technology, expects to supply key components for products developed under the initiative. Westport shares jumped $3.95 or 17 per cent to $27.10.Belden Inc. (NYSE:BDC) has made a friendly takeover offer for Montreal-based Miranda Technologies Inc. (TSX:MT), which makes high-performance hardware and software for the television industry. Belden’s offer of $17 per share cash values Miranda at about $371.5 million. Miranda’s share price jumped 62 per cent to $16.87.
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