* TSX up 179.16 pts, or 1.5 pct, at 12,420.92
* Optimism on Greece helps drive gains
* Canadian Natural up 7 pct after earnings report
By Jon Cook
TORONTO, Nov 3 (Reuters) - Toronto’s main stock index extended gains on Thursday, rising more than 1 percent on stronger commodity prices, boosted by optimism for a resolution to the euro zone debt crisis and an interest rate cut by the European Central Bank.
After a call for his resignation by opposition party members, Greek Prime Minister George Papandreou softened his stance on a referendum on the country’s bailout package and retreated from his push for a confidence vote on the euro zone rescue fund, lifting the mood across global financial markets. [MKTS/GLOB]
“They’re pretty well trading with the headlines that are coming out of Greece right now,” said Robert Kavcic, an economist with BMO Capital Markets.
Oil and gold prices also got lift from the ECB’s surprise decision to cut its main interest rate to help tackle the debt crisis, a move that promised to boost credit availability and brighten prospects for commodity demand. [O/R] [GOL/] [MET/L]
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 179.16 points, or 1.5 percent, at 12,420.92 shortly after midday, after falling as low as 12,237.26 early in the session.
Nine of the 10 main sectors were higher, led by energy issues, which were up nearly 3 percent.
Canadian Natural Resources (CNQ.TO) led the sector higher, rising 7.3 percent to C$37.52. Suncor Energy (SU.TO) was up 3.6 percent to C$32.94.
Canadian Natural’s quarterly profit rose 40 percent and topped analyst expectations on higher output and crude price, with the country’s No. 2 oil producer forecasting a 17 percent production rise in 2012. [ID:nL4E7M31JS]
The materials sector rose 1.5 percent, aided by higher gold prices. Barrick Gold (ABX.TO) was the biggest gainer, rising 2.1 percent to C$52.24.
A U.S. Institute for Supply Management report that showed the vast U.S. services sector slowed modestly in October to its lowest level in three months, produced a slight drag on markets. [ID:nN1E7A20JG]
In individual company news, shares of Yellow Media Inc YLO.TO rose more than 14 percent to C$0.40 after it posted a 14 percent rise in third-quarter profit. [ID: nL4E7M32VE]
Valeant Pharmaceuticals VRX.TO rose 11 percent to C$43.37 after the specialty drugmaker said it would buy back up to $1.5 billion of its stock or debt, and that it returned to profit on a surge in revenue. [ID: nNN1E7A20BY]
Manulife Financial (MFC.TO) shares rose 2 percent to C$12.80 despite the life insurer reporting a steeper than expected loss in the third quarter. [ID:nN1E7A20B9]
Sun Life Financial (SLF.TO) shares were down 4.5 percent to C$22.93 after it reported a steep third-quarter loss and said its earnings sensitivity to weak financial markets was increasing. [ID:nN1E7A20LR]
Magna International (MG.TO) shares fell 4.3 percent to C$34.46 after it reported its earnings dropped sharply, partly due to rising costs at its European operations. [ID:nL4E7M31OM] (Editing by Rob Wilson)