By Malcolm Morrison, The Canadian Press

TORONTO - North American stock markets were positive Wednesday afternoon after the U.S. Federal Reserve said it would leave rates at near zero "for an extended period" to encourage a fragile economic recovery.

The S&P/TSX composite index gained 73.9 points to 11,099.8 while the Dow Jones industrials gained 82.5 points to 9,854.4 as the Fed also said U.S. economic activity has "continued to pick up" and that the housing market also has grown stronger, a key ingredient to a sustained recovery.

The Toronto stock market had been up earlier by more than 150 points as commodity prices headed higher amid stronger reports on the U.S. service sector and employment, which boosted optimism about the American economy.

But gains in financial and energy stocks deteriorated and the gold sector turned negative, moving down almost one per cent even as bullion closed at another record high. December gold gained $2.40 to US$1,087.30 an ounce.

Goldcorp Inc. (TSX:G) moved down $1.03 to $41.93.

The Canadian dollar rose 0.59 of a cent to 94.21 cents US.

The base metals sector was the leading component, up 2.5 per cent with December copper up 3.7 cents to US$2.993 a pound. Teck Resources (TSX:TCK.B) was ahead 70 cents to $32.08.

The TSX energy sector had been up about two per cent but by late afternoon was ahead less than 0.5 per cent even as the December crude contract on the New York Mercantile Exchange gained 42 cents to US$80.02 a barrel. Canadian Natural Resources (TSX:CNQ) gained 87 cents to $69.87.

Market heavyweight Research In Motion also weighed on the TSX, losing $2.54 to $61.35 after brokerage Piper Jaffray & Co. maintained its neutral rating on the stock, but lowered its price target from US$67 to US$63. In New York, the stock was down $1.76 to US$57.85.

The stock was punished earlier in the week in the wake of a downgrade to sell from buy by a Citigroup analyst on worries about competition in the smartphone market.

The TSX Venture Exchange was ahead 4.09 points to 1,330.84.

New York markets were also higher as traders took in some positive employment data two days before the U.S. government releases its October non-farm payrolls report.

The ADP employment report said the U.S. private sector shed 203,000 jobs in October. That's down from the 227,000 jobs lost in September and was the seventh straight month of declining job losses. Economists expect the U.S. government's report to show that 175,000 jobs were lost last month.

The Nasdaq composite index climbed 10.82 points to 2,068.14 while the S&P 500 index was up 8.15 points to 1,053.55.

Stocks also advanced despite a disappointing reading on the U.S. service sector, even as the component expanded for a second straight month.

The Institute for Supply Management's services index fell to 50.6 in October from 50.9 in September. Although the index didn't meet forecasts, the ISM said new orders, which are an indicator of future business activity, grew faster.

The TSX got a lift from Magna International (TSX:MG.A). Its shares climbed $3.10 or 7.2 per cent to $46.10 after General Motors Co. said Tuesday it will keep its European Opel unit and restructure it instead of selling a 55 per cent stake to the Canadian auto parts maker and its partner, Russian lender Sberbank. GM CEO Fritz Henderson said Europe's business environment and GM's overall health have both improved since it put the division up for sale.

The TSX was also supported by some positive earnings reports.

HudBay Minerals Inc. (TSX:HBM) shares climbed $1.18 to $15.60 after it said Tuesday that it earned $20 million, or 13 cents per share for the quarter ended Sept. 30 compared with a profit of $2.8 million or two cents per share a year ago. Revenue totalled $194.6 million, down from $247.4 million.

Fertilizer company Agrium Inc. (TSX:AGU) said quarterly net income declined to US$26 million or 16 cents per diluted share in the third quarter, down 92 per cent a year earlier. The decline was in line with a warning issued by the company on Oct. 23. Revenue slipped to $1.8 billion from $1.9 billion in the third quarter of 2008. Agrium shares gained 38 cents to $51.69.

Shares in Enbridge Inc. (TSX:ENB) advanced 86 cents to $42.81 after the company more than doubled its profit in the third quarter to $303.8 million. The pipeline company increased full-year guidance to a range of $2.30 to $2.36 in adjusted earnings per share.

TransCanada Corp. (TSX:TRP) reported net income fell to $345 million or 50 cents per share in the third quarter, down from $390 million or 67 cents in the same period of 2008. Comparable earnings per share fell to 49 cents from 63 cents, which met analyst expectations. Revenue rose to $2.25 billion from $2.14 billion, which beat analyst estimates and its shares improved by five cents to $32.92.

Brewer Molson Coors (TSX:TPX.B) (NYSE:TAP.A) says its third-quarter profit rose 37 per cent although revenue fell despite price increases across its major markets. It also credited better cost controls for the increase in profit. In New York, its shares declined $1.80 to US$47.

In other corporate news, oilsands junior Opti Canada Inc. (TSX:OPC), a minority partner in the Long Lake project in northern Alberta, says it is exploring "strategic alternatives," which may include selling assets or the entire company. The operator of Long Lake is Nexen Inc. (TSX:NXY). The two companies had to put production at Long Lake on hold earlier this year due to problems with the project's water treatment equipment. Its shares surged 18 cents or 9.4 per cent to $2.08.