TORONTO - The Toronto stock market closed higher Monday as traders took in a multibillion-dollar offer for a Canadian miner and a Statistics Canada report that showed the economy grew faster than expected in December.

The S&P/TSX composite index backed off earlier gains to move up 84.37 points to 14,136.5, with the mining sector leading the way. The TSX Venture Exchange added 15.92 points to 2,391.54.

The Canadian dollar rose 0.76 of a cent to 102.94 cents US -- its highest level since November 2007.

The loonie -- whose value has soared alongside the price of oil and other commodities -- was bolstered by the better than expected economic report and as the greenback lost ground against most other major currencies. The Canadian currency also gained ground ahead of a Bank of Canada interest rate announcement set for Tuesday.

Statistics Canada said the GDP grew at an annualized rate of 3.3 per cent in the fourth quarter after expanding 1.8 per cent in the third quarter. That was significantly stronger than the 2.3 per cent pace the Bank of Canada expected in December.

For the full year 2010, Canada's gross domestic product grew 3.1 per cent after a 2.5 per cent decline in 2009.

"Real GDP growth in the fourth quarter of 2010 beat the Bank of Canada's January forecast by a full percentage point," said Diana Petramala, an economist at TD Bank (TSX:TD).

"If Canadian real GDP growth continues at this pace, the economy will be operating at full capacity by the end of this year -- slightly ahead of when the Bank of Canada predicted back in January."

The figures could put pressure on the central bank to raise interest rates sooner than expected. The Bank of Canada is expected to provide some insight into where it plans to go when it makes its next interest rate announcement Tuesday.

Douglas Porter, deputy chief economist at Bank of Montreal, said the upbeat report begins to tip the balance back in favour of earlier rate hikes.

"We had been looking for the bank to wait until their July meeting before restarting the rate hike process, and are still comfortable with that call. But, if there is a surprise to our rate call, it now looks like the bank would go earlier, rather than wait longer."

The April gold contract added 60 cents to US$1,409.90 an ounce on the New York Mercantile Exchange, while copper gained four cents to US$4.48 a pound. The mining sector gained 1.8 per cent with shares in HudBay Minerals Inc. (TSX:HBM) up 26 cents at C$16.85.

Oil prices lost 91 cents to US$96.97 a barrel after spiking last week as Libya's violent power struggle disrupted crude output. On the TSX, the energy sector rose 1.11 per cent with shares in Suncor Energy Inc. (TSX:SU) up 76 cents at C$45.66.

The jump in oil prices to over US$103 a barrel last Thursday raised concerns that sharply higher prices would derail what is a fragile economic recovery in many parts of the world. But crude ended the week at US$97.88 amid signs the crisis in Libya may have cut crude supplies less than previously thought.

Markets have started off the week seemingly more comfortable with political risk as equities have been rebounding while crude oil has drifted back a bit. The TSX finished last week down about 70 points as the wave of unrest in the Middle East persuaded investors to take some profits from a lengthy rally.

Investors will have plenty to chew on this week, including the direction of volatile oil prices, the Bank of Canada rate decision and a busy week of earnings reports from Canadian banks and other companies.

In corporate news, shares in Lundin Mining Corp. (TSX:LUN) soared nearly 19 per cent or $1.20 to $7.85 after Equinox Minerals Ltd. (TSX:EQN) confirmed that it will make an offer to acquire the Vancouver-based miner for C$4.8 billion in cash and stock. The Equinox offer of $8.10 per share was a 26 per cent premium over Lundin's closing price of $6.45 on Friday.

The news comes less than a month after Lundin agreed to a merger of equals with Inmet Mining Corp. (TSX:IMN) aimed at creating a new company called Symterra Corp., with shareholder votes scheduled for March 14.

Inmet shares fell 49 cents to $66.81, while Equinox stock was off nearly nine per cent or 54 cents at $5.73.

RioCan Real Estate Investment Trust (TSX:REI.UN) reported fourth-quarter profits rose 551 per cent to $179.4 million from $27.5 million a year ago as it benefited from a one-time non-cash reversal on future income taxes worth $150 million. Units in the trust added 44 cents to $24.22.

Quadra FNX Mining Ltd. (TSX:QUX) shares gained five per cent or 70 cents to $14.22 after it reported fourth-quarter net earnings of US$57.9 million or 30 cents per diluted share, compared with US$46.5 million or 46 cents in the same 2009 period. Revenues for the three months ended Dec. 31 were US$331.9 million, up from US$176.1 million.

Wall Street markets were mostly higher amid stabilizing oil prices and signs the U.S. economy may be improving.

The Dow Jones industrial average was up 95.89 points at 12,226.34, the Nasdaq added 1.22 points to 2,782.27 and the broader S&P 500 index rose 7.3 points to 1,327.22.

In U.S. economic news, the National Association of Realtors said its index of sales agreements for previously occupied homes fell 2.8 per cent last month to a reading of 88.9, the second straight monthly decline.

Meanwhile, the U.S. Commerce Department said American consumers increased spending by just 0.2 per cent last month despite a one per cent gain in personal incomes -- the largest income gain in nearly two years.

Another measure in that report showed that a key measure of inflation trends, an index of prices paid by consumers excluding food and energy, rose a meagre 0.1 per cent in January.

A more closely watched economic update will come later in the week when the U.S. government releases its employment report for January. Economists expect it to show the strongest job growth since May 2010.