The close: DAVID BERMAN
RTGAM



Stocks closed higher on Tuesday after a slow start, with investors initially reacting cautiously to China's decision to raise its key interest rate.

The Dow Jones industrial average closed at 12,233.15, up 71.52 points, or 0.6 per cent - marking its seventh straight gain. The broader S&P 500 closed at 1,324.57, up 5.52 points, or 0.4 per cent, up 0.4 per cent. In Canada, the S&P/TSX composite index closed at 13,892.52, up 80.59 points, or 0.6 per cent.

Gold producers were strong after the price of gold jumped to $1,364.10 (U.S.) an ounce, up $15.90, after China raised its key rate by a quarter of a point, stirring worry that the country's central bank is concerned about inflation. Barrick Gold Corp. rose 2.5 per cent and Goldcorp Inc. rose 4.8 per cent.

However, other key commodities declined on concerns that China's economy will slow down. Exxon Mobil Corp. fell 1.1 per cent and Canadian Natural Resources Ltd. fell 0.5 per cent.

Meanwhile, McDonald's Corp. rose 2.6 per cent after it reported that global sales at stores open for at least one year rose 5.3 per cent in January, topping expectations.

U.S. consumer discretionary stocks were also strong, with J.C. Penney Co. Inc. up 4.9 per cent and Home Depot Inc. up 1.5 per cent. Toyota Motor Co. rose 4 per cent in New York after the world's largest auto maker reported a slide in quarter earnings but gave an upbeat forecast for the remainder of its fiscal year.