The Canadian dollar drew within a penny of parity with the U.S. dollar Thursday as strong manufacturing data boosted hopes for a global economic recovery.

The loonie closed at 99.17 cents US, up 0.73 of a cent US.

Markets gained as a survey showed growing manufacturing activity in the U.S., Europe and China. (Seth Wenig/Associated Press)

The Toronto stock market made solid gains despite earnings disappointments from two major Canadian corporations.

The S&P/TSX composite finished up 113.33 points to 12,151.06, while the TSX Venture Exchange gained 25.99 points to 1,602.54.

A private trade group said the U.S. manufacturing sector expanded in March at its strongest pace since July 2004. The Institute for Supply Management, a trade group of purchasing executives, said its gauge of industrial companies rose to 59.6 in March from 56.5 in February — the eighth straight month of expansion.

Manufacturing activity in the eurozone reached a 40-month high in March.

And two surveys showed China's manufacturing accelerated in March. The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, rose to 55.1 in March from 52 in February. Numbers above 50 show manufacturing activity expanding.

A separate index issued by HSBC Corp. climbed to 57.0 in March, up from 55.8 in February but still below its reading of 57.6 in January.

"When you look at the U.S. number with details are pretty good, you see big growth in exports and imports are up as well," said John Johnston, chief strategist, The Harbour Group at RBC Dominion Securities.

"So, global trade is expanding and you're seeing a co-ordinated global economic expansion."

Research In Motion Ltd. shares ended down $6.20, or more than eight per cent, at $69.05, after the BlackBerry maker missed expectations. RIM earned $710.1 million US, or $1.27 per share for the quarter ended Feb. 27, a penny below many analysts' expectations.

Bombardier Inc. shares lost 52 cents, or more than eight per cent, to finish at $5.71 after the transportation equipment manufacturer reported net income fell to $179 million US in the latest quarter ended Jan. 31.

That amounted to 10 cents per share — a penny below the consensus estimate compiled by Thomson Reuters. Bombardier was down 15 cents to $6.08 in Toronto.

Oil extends rally

Oil extended a two-month rally with the May crude contract closing up $1.11 to $84.87 US a barrel. Investors expect a gradual recovery in the U.S. economy this year will eventually boost crude consumption.

So far, however, demand remains sluggish. The Energy Information Administration said crude inventories rose by 2.9 million barrels last week, slightly more than analysts expected.

Canadian Natural Resources Ltd. shares gained $3.06 to $78.23 after it said it plans to buy up to 2.5 per cent of its outstanding shares from public markets over the coming year.

The June bullion contract on the New York Mercantile Exchange finished ahead by $11.70 to $1,125.10 US an ounce.

In New York, markets also advanced as investors were encouraged by a government report that said initial jobless claims dipped last week. The Labour Department said initial claims for unemployment benefits fell to 439,000 last week. Economists had forecast claims would drop to 440,000.

The Dow Jones industrial average was 70.44 points higher to 10,927.07. The Nasdaq composite index rose 4.62 points to 2,402.58 while the S&P 500 index gained 8.67 points to 1,178.10.

With files from The Canadian Press