CANADA STOCKS-TSX rises 1 percent after two-day slump

Wed Nov 2, 2011 5:50pm EDT
 
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* TSX up 126.66 pts, or 1 pct, at 12,241.76

* Materials, energy sectors lead gains

* U.S. economic data boosts commodities

* Greece, euro zone fears still weigh (Adds details, analyst comments)

By Jon Cook

TORONTO, Nov 2 (Reuters) - Toronto's main stock index rallied on Wednesday after two days of sharp declines, finishing up 1 percent as U.S. economic data and stronger commodity prices helped offset fears about the looming Greek referendum on the euro zone's bailout package.

Copper, oil, gold and base metals prices responded positively to a U.S. Federal Reserve statement that offered a moderately brighter economic outlook and appeared to leave open the door for further easing. [ID:nN1E7A01ZU] [GOL/] [O/R] [MET/L]

The market's positive performance was held in check, however, by lingering fears that a Greek confidence vote would result in the rejection of a 130 billion euro bailout package, which would have significant repercussions for the global economy. [MKTS/GLOB]

"The risk of a disorderly Greek default has the capacity of putting major economies back in recession," said Fergal Smith, managing market strategist at Action Economics.   Continued...