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Markets bounce back

After five straight days of losses, North American stock markets were closing the week with big gains, propelled by a more than 12 per cent jump in crude oil prices Friday.

At mid-afternoon, the Toronto Stock Exchange's S&P/TSX composite index was up 246.55 or two per cent at 12,333.92.

The increase in oil prices, which saw the March contract shoot up $3.16 to US$29.37 a barrel, also helped the commodity-sensitive Canadian dollar, which added 0.46 of a U.S cent to 72.29 cents US.

Elsewhere in commodities, the March contract for natural gas slipped three cents to US$1.96 per mmBtu, while March copper rose three cents to US$2.03 a pound.

Gold bullion, which has enjoyed a big bounce in recent days amid a general flight to safety, saw the April contract lose $9.10 to US$1,238.70 a troy ounce.

In New York, the Dow Jones industrial average was up 269.52 points or 1.72 per cent to 15,929.70, while the broader S&P 500 advanced 29.24 points or 1.60 per cent to 1,858.32. The Nasdaq gained 59.79 points or 1.40 per cent to 4,326.63.

New York markets were also helped by an encouraging report on retail sales from the U.S. Commerce Department, which said sales increased a seasonally-adjusted 0.2 per cent in January, the same as the previous month. Excluding the effect of falling gasoline prices, sales rose 0.4 per cent.

Analysts said the modest gain, better than the 0.1 per cent increase expected by economists, was evidence that consumers kept shopping despite sharp drops in stock prices.

"Oil, which has been one of the most fickle, most volatile ... (factors) that everybody's watching, is having a nice day," said Tim Dreiling, regional investment director for The Private Client Reserve of U.S. Bank.

"Europe is continuing to look good. And it looked like (the market) was oversold."

In Europe, Germany's DAX and France's CAC 40 both closed up 2.5 per cent, while Britain's FTSE 100 soared 3.1 per cent.

In Asia, Japan's main stock index fell sharply, leading other Asian markets lower. Tokyo's Nikkei 225 plunged 4.8 per cent after earlier sinking as much as 5.3 per cent. Hong Kong's Hang Seng fell 1.2 per cent. South Korea's Kospi gave up 1.4 per cent and Australia's S&P/ASX 200 fell 1.2 per cent.

Markets in China and Taiwan have been closed all week for the Lunar New Year holidays. They reopen Monday, while American markets will be closed for Presidents' Day and the TSX is closed for Family Day.



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