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  Toronto's Financial District is seen on January 21, 2010.THE CANADIAN PRESS/Chris Young

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By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was higher Tuesday as crude oil prices rose and traders took in positive data from Europe’s biggest economy.

The S&P/TSX composite index rose 44.44 points to 11,951.35 while the TSX Venture Exchange was up 3.4 points to 1,494.31.

A sharp rise in oil prices helped push the Canadian dollar up 0.11 of a cent to 97.59 cents US.

U.S. markets also advanced despite data showing a weaker than expected start to the Christmas retail shopping season.

The Dow Jones industrial average up 120.11 points to 12,141.5, the Nasdaq composite index climbed 21.84 points to 2,634.1 and the S&P 500 index was ahead 12.25 points to 1,248.72.

The Commerce Department said Tuesday that retail sales rose 0.2 per cent in November, lower than the 0.6 per cent rise that economists had expected. That’s also lower than October’s gain, which was revised higher to show a 0.6 per cent increase.

Sales rose at electronics and appliance stores, auto dealers, clothing stores and department stores. But sales fell at building materials stores, gas stations, and grocery stores.

There was some rare good news from the eurozone as a closely-watched survey showed that German investor sentiment rose in December following nine straight falls.

ZEW’s main investor sentiment index for December rose 1.4 points to minus 53.8 points overall. However, analysts had forecast a bigger rise to minus 52.

The survey also recorded a five point rise in economic sentiment for the 17-nation eurozone, taking the index up to minus 54.1 point.

ZEW said the increases may reflect some optimism over last Friday’s deal to adopt a new European Union fiscal pact that would see a central authority overseeing budgets and impose tighter controls on spending by member countries. This would be backed up by automatic penalties if countries spend too much.

Optimism was sorely lacking on stock markets Monday as sentiment took a hit after rating agencies Moody’s and Fitch both said the deal was insufficient and would not materially address the crushing debt loads of some nations or their rising borrowing costs.

Moody’s warned that it will review all EU governments’ ratings for possible downgrades in early 2012 — a threat that analysts said was particularly worrisome to France, a major contributor to the European Financial Stability Facility, Europe's emergency bailout fund. A downgrade of France’s triple A rating could hurt its ability to fulfil its commitments to the fund.

Investors are also awaiting the response of rival agency Standard & Poor’s. Last week it warned that it could downgrade most of the eurozone economies, including Germany, if the deal failed to deliver.

Meanwhile, investors also looked ahead to a mid-afternoon announcement on interest rates by the U.S. Federal Reserve. The central bank is widely expected to keep interest rates near zero through next year but traders will be looking to the Fed's latest take on the economy.

Economists think Fed officials will be completing a plan to forecast the direction of short-term rates starting next year.

Doing so would help assure investors, companies and consumers that rates won’t rise before a specific time. The new communications strategy could be unveiled as soon as next month, after the Fed’s Jan. 24-25 policy meeting.

There was good news on the corporate front from chemicals maker DuPont. It forecast that profit will rise seven to 12 per cent in 2012, compared with what it expects to earn this year, as international sales increase. On Friday, DuPont cut its 2011 earnings forecast due to weaker demand in several sectors, including electronics and industrial supplies. DuPont shares rose two per cent to US$44.80.

Energy stocks led TSX advances while oil prices advanced with the January crude contract on the New York Mercantile Exchange ahead $2.89 to US$100.66 a barrel. Some analysts attributed the spike in oil prices to military exercises being conducted by Iran in the Strait of Hormuz, a narrow, strategically important waterway between the Gulf of Oman in the southeast and the Persian Gulf. It is a major exit point for oil shipments.

Suncor Energy (TSX:SU.TO - News) gained 63 cents to $29.69 and Imperial Oil (TSX:IMO.TO - News) climbed 81 cents to $44.17.

Financials also helped support the Toronto market with Manulife Financial (TSX:MFC.TO - News) ahead 11 cents to $11.02 while Royal Bank (TSX:RY.TO - News) rose 40 cents to $48.97.

The gold sector was up 0.7 per cent while the February gold contract erased early losses to move up $7.20 to US$1,675.40 an ounce. Barrick Gold Corp. (TSX:ABX.TO - News) gained 34 cents to $49.57.

The base metals sector led decliners while March copper was up two cents at US$3.48 a pound.

Ivanhoe Mines (TSX:IVN.TO - News) was the major decliner in the group, tumbling $2.70 or 12.6 per cent to $18.58. The drop came after international mining giant Rio Tinto was successful in its arbitration challenge against certain provisions of a poison pill defence adopted by Ivanhoe aimed at preventing an unwanted takeover.

Elsewhere in the sector, HudBay Minerals (TSX:HBM.TO - News) rose 10 cents to $10.38.

European bourses were higher after racking up losses on Monday with London's FTSE 100 index ahead 1.73 per cent, Frankfurt's DAX gained 0.96 per cent while the Paris CAC 40 rose 0.38 per cent.

Elsewhere in Asia, stocks took a battering following the previous day’s retreats in Europe and the U.S.

Japan’s Nikkei 225 fell 1.2 per cent, South Korea’s Kospi gave up 1.9 per cent and Hong Kong’s Hang Seng lost 0.7 per cent. On mainland China, the benchmark Shanghai Composite Index fell 1.9 per cent while the Shenzhen Composite Index lost three per cent.

In other corporate news, Whistler Blackcomb Holdings Inc. (TSX:WB.TO - News) shares gained 14 cents to $9.94 after it said it booked net earnings of $15.1 million in period from Nov. 9, 2010 to Sept. 30. 2011. The ski and mountain resort earned 40 cents per share during that period, when Whistler Blackcomb became a public company.

Troubled Chinese timberland owner Sino-Forest Corp. (TSX:TRE.TO - News) said Monday that it will not make a US$9.8-million interest payment due this week and that it will miss deadlines to release both its third-quarter results and a report on fraud allegations.