* TSX up 73.98 pts, or 0.6 pct, at 12,697.34
* At highest level since Sept. 7, 2011
* Materials issues rise, financials fall
* U.S. housing data boosts sentiment
* Weak euro zone, China data weighs
By Jon Cook
TORONTO, Feb 22 Toronto's main stock index
extended gains on Wednesday afternoon after hitting a five-month
high in the previous session, as gold mining issues were boosted
by higher bullion prices and strong U.S. housing data.
Gold shares surged nearly 2 percent after bullion hit a
three-month high on Wednesday as technical buying helped the
precious metal reverse initial losses.
"We are seeing all the funds step in. It (technical buying)
is the only thing at the moment that we can pin it on," said
Frank McGhee, head precious metals trader at Integrated
Brokerage Services LLC.
Gold's upswing boosted the index's heavyweight materials
sector by 1.7 percent. Barrick Gold, the world's top
producer, jumped 2 percent to C$49.32 while Goldcorp rose
2.4 percent to C$49.30.
At 2:55 p.m. (1955 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 73.98 points, or 0.6
percent, at 12,697.34, its highest level since Sept. 7, 2011.
The market mood was also lifted as U.S. home resales surged
in January to a 1-1/2 year high, while the supply of properties
on the market was the lowest in almost seven years, pointing to
a nascent housing recovery in Canada's top trading partner.
"The prospects of the U.S. are beginning to get a little
brighter," said Rick Hutcheon, president and chief operating
officer at RKH Investments.
"There are signs that there may be some improvement in the
nearer term and that's what the market has been waiting for."
Oil and gas issues were up 0.6 as Brent crude oil reached a
nine-month high on Wednesday, supported by Iran-related supply
worries. Suncor Energy was the biggest heavyweight
gainer, rising 2 percent to C$35.43.
The gradually brightening U.S. economy has helped the TSX
rally more than 5 percent this year despite continued unease
about conditions in Europe.
"It's a North American phenomenon," Hutcheon said. "We've
become a little more inward looking and a lot of that has been
forced on us by the grief that's going on in Europe."
Potash Corp, the world's top fertilizer producer,
rose 1.1 percent to C$47.38 on hopes for increased U.S. demand.
Optimism about Tuesday's approval by European officials of
another multibillion-dollar bailout for Greece waned on
Wednesday as data showed the euro zone may be sliding back
Preliminary data also showed China's new export orders
shrank in February in a worrying sign that the euro area debt
crisis is afflicting the Asian powerhouse.
Financial shares fell 0.2 percent. Bank of Nova Scotia
led the retreat, sliding 0.8 percent to C$53.75.
In individual company news, Rogers Communications
rose 1.1 percent to C$38.18 after it reported a stronger than
expected quarterly profit and raised its dividend.