Canada's main stock index rose on Thursday to a more than one-week high in a broad rally led by energy and financials, while BlackBerry Ltd (BB.TO) jumped after an influential investment firm said the technology company's stock could double.

The Toronto Stock Exchange's S&P/TSX composite index closed up 120.00 points, or 0.78 per cent, at 15,469.91, its highest close since May 23.

It was buoyed by optimism that acceleration in U.S. economic growth will help the outlook for Canada's economy, said Peggy Bowie, senior trader at Manulife Asset Management.

U.S. factory activity rose in May, according to data on Thursday.

BlackBerry was among the most influential gainers, climbing nearly eight per cent to $15.42 after Citron Research said it had a 24-month price target of US$20 on expectations that BlackBerry will profit from the increasing application of its security and other software technology in various industries, such as automotive.

"The underlying feeling is that our market has a lot to offer, people just have to look at the right things," Bowie said.

The price of oil, a key Canadian export, was steady a day after diving 2.7 per cent on higher OPEC crude output.

U.S. crude oil prices settled up four cents US at US$48.36 a barrel, helped by an industry report showing that U.S. stockpiles had fallen more than expected.

Energy rose 1.1 per cent, with Enbridge Inc (ENB.TO) the most influential advancer in the group, rising 1.3 per cent to $52.67.

The financials group gained 0.7 per cent, helped in part by Element Fleet Management Corp (EFN.TO), which rebounded after Wednesday's losses related to unfounded speculation that it was a short-selling target of hedge fund Muddy Waters.

Asanko Gold Inc (AKG.TO) fell 7.8 per cent to $2.02 a day after Muddy Waters said it was shorting the company's stock.

Recreational vehicle maker BRP Inc (DOO.TO) shares surged 12.7 per cent to $37.03 after it reported a much stronger-than-expected quarterly result and announced a quarterly dividend and share repurchase.

Eight of the index's 10 main groups ended higher.

Materials, home to precious and base metals miners, slipped 0.3 per cent, pinched by the price of gold, which dipped 0.5 per cent to US$1,265.7 an ounce after the U.S. data boosted the greenback, and nickel prices fell to an 11-month low on concerns of excess supply.

Barrick Gold Corp (ABX.TO) fell 1.8 per cent to $21.95, while dairy producer Saputo Inc (SAP.TO) was down 3.8 per cent at $43.37 after reporting lower-than-expected quarterly profit.

U.S. MARKETS

U.S. stocks advanced on Thursday, with each of the major U.S. indexes notching record highs, after a batch of economic data suggested the economy was picking up speed.

The ADP private sector employment report showed 253,000 jobs were added in May, well above the 185,000 estimated by economists polled by Reuters.

The report could signal a strong government payrolls report on Friday that includes hiring in both public and private sectors, which would cement expectations for an interest rate hike by the Federal Reserve in two weeks.

"More than anything it is employment data driven, it was such a resounding uptick over expectations," said Paul Springmeyer, investment managing director at the Private Client Reserve at U.S. Bank in Minneapolis, Minnesota.

"It bodes well for the Fed; certainly the numbers are very, very high in terms of the likelihood of that [hike] coming through for June."

Forecasts are for 185,000 nonfarm jobs created in May.

In addition to the ADP data, a separate report showed factory activity ticked up in May after two straight months of slowing.

San Francisco Federal Reserve Bank President John Williams said on Wednesday that while he sees three interest rate hikes this year as his baseline scenario, four rate increases would also be appropriate if the economy got an unexpected boost.

Fed Governor Jerome Powell, an influential policymaker, told CNBC that he expects three rate hikes this year.

Forecasts from Fed officials suggest that a median of two more hikes are planned before the end of the year.

Traders are currently pricing in an 88.9-per-cent chance of a quarter-percentage-point rate hike at the U.S. central bank's June 13-14 meeting, according to Thomson Reuters data.

The Dow Jones Industrial Average rose 135.53 points, or 0.65 per cent, to end at 21,144.18, the S&P 500 gained 18.26 points, or 0.76 per cent, to 2,430.06 and the Nasdaq Composite added 48.31 points, or 0.78 per cent, to 6,246.83.

Gains were broad, with each of the 11 major S&P sectors on the plus side, led by gains in materials, up 1.09 per cent and health care, up 1.18 per cent.

Deere's (DE.N) shares were up 1.8 per cent to close at US$124.70 after the farm and construction major said it would buy privately held German road construction company Wirtgen Group for US$5.2 billion, including debt.

Hewlett Packard Enterprise (HPE.N) dropped 6.9 per cent to US$17.52 as the biggest drag on the S&P 500 after the company reported a steep fall in quarterly revenue.

Palo Alto Networks (PANW.N) jumped 17.2 per cent to a more than four-month high of US$138.99 after the cybersecurity company's profit forecast topped expectations.

Advancing issues outnumbered declining ones on the NYSE by a 4.73-to-1 ratio; on Nasdaq, a 3.03-to-1 ratio favored advancers.

The S&P 500 posted 28 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 82 new highs and 70 new lows.

About 6.89 billion shares changed hands in U.S. exchanges, compared with the 6.72 billion daily average over the last 20 sessions.