TORONTO — Stronger financial stocks helped keep the Toronto stock market positive at midmorning Tuesday after Bank of Montreal (TSX:BMO) handed in earnings that beat analyst estimates.

U.S. markets surged on data showing a sharp spike in consumer confidence.

Toronto's S&P/TSX composite index moved 82.7 points higher to 10,152.2.

Bank of Montreal shares were ahead $1.20 to $42.76 after it said that higher amounts to cover credit losses helped cut profits by 44 per cent to $358 million during the second quarter despite higher net earnings in its personal banking and capital markets divisions.

Provision for credit losses climbed $151 million to $372 million as the Canadian economy works through a severe recession.

Stripping out the effect of a charge of $80 million related to still shaky capital markets and $80 million in severance costs, BMO reported adjusted cash earnings per share of 93 cents, ahead of the 91 cents forecast by analysts surveyed by Thomson Reuters.

CIBC (TSX:CM), Scotiabank (TSX:BNS) and TD Bank (TSX:TD) report Thursday while Royal Bank (TSX:RY) issues earnings on Friday. The financial sector rose 1.7 per cent with those banks up at least 1.2 per cent.

The TSX Venture Exchange was down 5.35 points to 1,091.08.

A stronger U.S. dollar helped send the Canadian currency down a fifth of a cent to 88.81 cents US.

New York's Dow Jones industrial average jumped 144.1 points to 8,421.4 after the U.S. Conference Board said consumer confidence in May soared to the highest level since last September amid tentative signs that the economy is improving.

Its Consumer Confidence Index, which had dramatically increased in April, zoomed past economists' expectations to 54.9 from a revised 40.8 in April.

Economists surveyed by Thomson Reuters were expecting 42.3.

The Nasdaq composite index rose 41.39 points to 1,733.4 while the S&P 500 index was ahead 14.2 points to 901.2.

A widely watched index shows home prices fell at the sharpest rate ever in the first quarter.

The Standard & Poor's/Case-Shiller National Home Price index released Tuesday reported home prices tumbled by 19.1 per cent in the first quarter, the most in its 21-year history.

Analysts played down North Korea's test of two more short-range missiles following the test of a nuclear bomb on Monday.

"Commodity trading today indicates that the market response to (the) nuclear and missile tests has been very limited," said a commentary from CMC Markets.

"Commodities that normally may respond to political risk concerns such as gold and crude oil have actually been trading lower today."

The TSX energy sector was up slightly as crude losses narrowed. The July crude contract on the New York Mercantile Exchange dropped 48 cents to US$61.19 a barrel.

Shares in Ivanhoe Energy (TSX:IE) were eight cents higher to $1.65 after the company won the rights to explore an Amazon oil block.

Vancouver-based Ivanhoe will spend US$4 billion to develop an area that could contain 4.5 billion barrels of extra-heavy crude, Ecuador's state oil company said.

The June bullion contract in New York moved down $12.60 to US$946.30 an ounce, taking the gold sector down 1.8 per cent. Barrick Gold Corp. (TSX:ABX) faded $1.39 to $41.40.

The base metals sector shook off early losses to move up 0.4 per cent higher as professional services firm Ernst & Young predicted a "severe supply constraint" developing in many metals and minerals, causing prices to jump to new highs.

Earlier, Rio Tinto Ltd., the world's third-largest miner, said it has agreed with Japan's Nippon Steel Corp. to cut its iron ore prices for this year by 33 per cent, foreshadowing a wider industry slump in prices.

Teck Resources (TSX:TCK.B) rose 17 cents to $15.97 while Equinox Minerals (TSX:EQN) ran up 16 cents to $2.44.

Uranium miner Denison Mines Corp. (TSX:DML) has struck a deal with a syndicate of investment dealers co-led by GMP Securities L.P. and Cormark Securities to sell 40 million common shares at C$2.05 each to raise C$82 million. Its shares fell 29 cents to $2.10.

Copper and zinc miner HudBay Minerals Inc. (TSX:HBM) has closed its previously announced sale of a 16.7 per cent stake in Lundin Mining Corp. (TSX:LUN), to GMP Securities (TSX:GMP) for $236 million, resulting in a pretax $100-million gain. HudBay shares added one cent to $7.43 while Lundin slipped four cents to $2.56.

Elsewhere in the financial group, Manulife Financial Corp. (TSX:MFC) shares were ahead 49 cents to $22.59 after it said Monday that it will raise $350 million in an issue of 14 million preferred shares.

The insurer had initially planned an offering of up to 10 million preferred shares, but increased the size of the deal a few hours later due to strong investor demand.

Overseas, Japan's Nikkei stock average fell 0.4 per cent, while Hong Kong's Hang Seng Index dropped 0.4 per cent.

Britain's FTSE 100 dipped 0.15 per cent and Germany's DAX index dropped 0.6 per cent as the government confirmed that its economy contracted by a record 3.8 per cent in the first quarter.

France's CAC-40 gained 0.75 per cent.