The S&P/TSX composite index rose 43.6 points to 13,610.2 while the TSX Venture Exchange gained 19.87 points to 2,108.48.
Investors also focused on Europe after credit rating agency Standard & Poor's lowered Greece's bond grade further into junk status because of risks that the country will have to negotiate an extension on its debt repayments.
The Canadian dollar lost early momentum after S&P lowered Greece's bond long-term bond grade on Monday by two notches to B from BB-, with "negative implications" for future efforts to improve public finances.
"It is one of those why should people be surprised (events)," said Gavin Graham, global strategist Excel Funds Management, "given that Greek debt has been trading at over 20 per cent interest rates for two year (bonds) and over 15 per cent for five and 10-year debt, effectively it's pricing in a default or at least a restructuring."
The dollar was down 0.07 of a cent to 103.34 cents US as the greenback strengthened following the downgrade.
The consumer discretionary sector rose 0.8 per cent after Canadian Tire (TSX:CTC.A) announced plans to buy Forzani Group Ltd. (TSX:FGL), the company behind major sporting goods retailers like Sport Chek and Athletes World in a deal worth $771 million. The transaction is valued at $26.50 per share, which is a 50 per cent premium on the closing price of Forzani's stock on Friday.
"There's still plenty of money around and companies are willing to actually spend it if they think they can make a decent return, because their profits are pretty good," added Graham.
Forzani shares soared $8.63 to $26.24 while Canadian Tire rose $1.91 to $60.50 following the announcement of the all-cash deal.
"You remember when they bought Mark's Work Warehouse, seven, eight years back, everyone asked what is Canadian Tire doing? It's actually worked out very well, it's been very successful," he said.
Commodity prices were higher after data on Friday showed that the U.S. economy created 268,000 jobs in April, the most since February 2006. Taking into account job cuts of government workers, the economy added a total of 244,000 jobs overall last month, well above the 185,000 jobs that analysts had predicted and easing worries that the economic recovery was faltering.
The TSX energy sector was up 0.1 per cent. Oil prices jumped as improved hopes over the U.S. economic recovery helped lower fears of much lower demand. The June crude contract on the New York Mercantile Exchange climbed $3.31 to US$100.49 a barrel after plunging almost US$17 or 14 per cent last week. Canadian Natural Resources (TSX:SU) fell 68 cents to C$41.62 and Husky Energy (TSX:HSE) gained 43 cents to $28.03.
Other commodities advanced as the June gold contract on the Nymex rose $15.70 to US$1,507.30 an ounce, taking the gold sector up 0.67 per cent. Barrick Gold Corp. (TSX:ABX) was ahead 42 cents to C$45.84 while Goldcorp Inc. (TSX:G) improved by 62 cents to $47.98.
The base metals sector gained 0.53 per cent while the July copper contract in New York was up five cents to US$4.02 a pound. Quadra FNX Mining (TSX:QUX) gained 28 cents to C$14.03 while First Quantum (TSX:FM) was ahead $4.34 to $128.06. First Quantum, which keeps its books in U.S. dollars, reported that it earned US$206.7 million attributable to shareholders in its latest quarter, up from $150.3 million in the first three months of 2010.
Commodity prices tumbled last week amid higher margin levels for silver and worries about the pace of the economic recovery. The selloff helped send the TSX down 2.7 per cent last week, leaving the main index up about 100 points from where it started 2011.
Market heavyweight Research In Motion Ltd. (TSX:RIM) also weighed on the TSX and the BlackBerry maker's shares fell $1.19 to C$43.37.
New York markets were slightly higher as the Dow Jones industrial average gained 11.99 points to 12,650.73. The Nasdaq composite index was down 4.01 points to 2,831.57 and the S&P 500 index was up 1.12 points to 1,341.32.
On the economic front, there was some negative data from the housing sector. Canada Mortgage and Housing Corp. reported that housing starts fell to 179,000 in April, down from 185,000 and below the 183,000 level that economists had expected.
In other earnings news from corporate Canada, Silver Wheaton Corp. (TSX:SLW) said first-quarter net earnings grew 142 per cent to US$122.2 million from $50.6 million a year earlier. Revenue jumped to a record $158.2 million from $85.9 million and its shares gained $1.01 to $35.65.
Valeant Pharmaceuticals (TSX:VRX) posted a $6.5-million profit in the first quarter as the drug developer's revenue more than doubled, largely as a result of last year's merger with Biovail. The earnings reversed last year's loss of $3.1 million and its shares advanced $1.18 to $49.85.
In other corporate news, Bombardier Inc. (TSX:BBD.B) shares were up six cents to $6.73 after its Bombardier Transportation division signed a framework agreement with Siemens AG for a US$3-billion share of a large German high-speed rail contract.
Earlier in Asia, Hong Kong's Hang Seng rose 0.8 per cent while Australia's S&P/ASX 200 added 0.3 per cent. But Japan's Nikkei 225 stock average fell 0.7 per cent.
European bourses also lost ground following the S&P downgrade with London's FTSE 100 index down 0.71 per cent, Frankfurt's DAX lost 1.24 cent and the Paris CAC 40 was off 1.29 per cent. For the latest updates PRESS CTR + D or visit Stock Market news Today
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