Bay Street stocks surged to the upside on Thursday and reached a new 6 1/2 week high. The index closed higher for the first time in three sessions.

The S&P/TSX Composite Index rallied 198.06 points or 2.25% to end at 8,995.50. The index touched above 9,000 in intraday trading for the first time since Feb. 10.

Mining stocks rallied 4.85% to lead the way. Lundin Mining (LUN.TO) soared 12.6% as the Congo mining minister said the government will not significantly alter contracts. Teck Cominco (TCK.B.TO) added 6.5% and Hudbay Minerals (HBM.TO) climbed 6.2%.

Technology stocks added 4.1%. Nortel (NT.TO) soared 81.8% after the company was granted permission by a U.S. bankruptcy judge to sell its data-switch business to Israel-based Radware for $17.7 million.

Research in Motion (RIM.TO) rallied 5.9% after its stock was upgraded by Goldman Sachs.

Industrials gained 3.9% as Canadian National Railway (CNR.TO) rallied 7% and Canadian Pacific (CP.TO) gained 5.6%.

Energy stocks rose 3.3% as crude oil gained on the NYMEX. Light sweet crude for May delivery climbed to $54.35, up $1.58 for the day. Oil hit as high as $54.66, its best mark since early January.

Savanna (SVY.TO) soared 10.9%, Canadian Oil Sands (COS.UN.TO) added 6.1%, Suncor (SU.TO) jumped 5.2% and Encana (ECA.TO) gained 2.9%. Berens Energy (BEN.TO) jumped 3,3% after the company reported fourth quarter funds from operations climbed 26% to C$10.05 million from C$7.99 million a year ago, and FFO per share rose 22% to C$0.11 from prior year's C$0.09.

In other corporate news, Isotechnika Inc. (ISA.TO) surged 10.7% after the biopharmaceutical company said its partner, Lux Biosciences, reported positive results for its treatment of uveitis, an autoimmune disease characterized by chronic inflammation of the eye.

Iamgold Corp. (IMG.TO) fell 1% after the company said it has completed its previously announced overnight marketed public offering of common shares at a price of C$8.75 each.

On the economic front, Parliamentary Budget Officer Kevin Page said the Canadian economy will shrink 8.5% in the first quarter. In testimony to the House of Commons Finance Committee, Page added output will fall 3.5% in the second quarter.

Across the border, Treasury Secretary Tim Geithner called for a stronger regulatory system with increased government power as he testified before the House Financial Services Committee.

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