Stocks in Canada, U.S. post 200-point gains

North America's major stock exchanges posted strong gains in trading Monday, shrugging off slumping GDP in Canada and GM's bankruptcy protection filing south of the border.

In Canada, the TSX rose 233.99 points to hit 10,604.06 in Monday's session. The gain, 2.26 per cent, means that Canada's major equity market has gained more than 1,200 points since the beginning of May.

In the United States, the Dow Jones industrial average jumped 221.11 points in the first session of the week, to reach 8,721.44.

Spring bloom

Canada's equity issues were helped by rising oil prices. A barrel of crude was up more than $2 US to $68.46 Monday, improving the view foreign buyers have of Canada's overall economic prospects.

As well, Canadian GDP for the first three months of the year dropped 5.4 per cent on an annualized basis. That performance was better than many economists had forecast and placed Canada ahead of other major industrialized countries save France.

Prices for other commodities rose as well, with natural gas up and copper up more than five per cent.

Stronger commodities prices helped push TSX energy and metals and mining issues higher.

Canadian miners were also assisted by foreign fears concerning the weakness of the American dollar. As the prospects for the greenback slip, investors often buy gold bullion as a store of value.

As the price of an ounce of gold approaches $1,000 US, however, investors become more interested in owning the shares of companies that dig the ore out of the ground, analysts said.

U.S. downturn easing: report

U.S. stocks popped partly because of a new report from the Institute for Supply Management. The survey indicated that American manufacturers continue to lose business, but the curve on that downward slope appears to be easing.

The reading for May, 42.8, was marginally better than economists had forecast and was the best showing since September 2008.

Although the historic bankruptcy filing of General Motors injected a dose of uncertainty into U.S. economic prospects, the move had already been anticipated by money markets, experts noted.