TORONTO -- Canada's main stock index bounced back Tuesday from two days of losses despite continued concerns about a weak global economic outlook.

The S&P/TSX composite index closed up 85.82 points at 16,151.68 as increased oil prices moved the energy sector higher.

The Toronto market hit an intraday high of 16,192.21.

The market rose after losing almost 179 points in two trading days on fears that an inversion in the yield curve in Canada and the United States signalled a possible recession.

But the jittery couple of days marked an overplay of investor concerns in light of positive growth expectations and realization there's a long lead time before a recession, said Craig Jerusalim, portfolio manager at CIBC Asset Management.

"It's really just the bounceback from an overreaction from the inversion in the yield curve," he said in an interview.

Jerusalim said there was more negative than positive data Tuesday with U.S. housing starts falling 8.7 per cent in February, building permits declining and consumer confidence waning in March.

On top of that, there are additional headwinds with Canada wanting to tie approval of the USMCA to the removal of aluminum and steel tariffs. There has also been a flare-up of tensions between Canada and China with a second canola producer being blocked from shipping their product to the Asian country.

"I would characterize today's performance as more of a bounceback from the sharp negative reaction yesterday and not as an indication that the coast is clear and that it's be smooth sailing from here on in for the rest of the year," added Jerusalim.

The market was helped by a rise in crude oil prices on supply disruptions in Venezuela and OPEC production cuts taking hold.

The May crude contract was up US$1.12 at US$59.94 per barrel and the May natural gas contract was down 2.3 cents at US$2.75 per mmBTU.

That pushed the key energy sector up 1.7 per cent led by Crescent Point Energy Corp., Encana Corp and Canadian Natural Resources.

Gold moved lower with the April gold contract losing US$7.60 at US$1,315 an ounce and the May copper contract was down 0.25 of a cent at US$2.85 a pound.

Still, the materials sector rose 0.9 per cent, lead by gains from First Quantum Minerals Ltd., Barrick Gold Corp and Teck Resources Ltd. The influential gold sector will lose some of its weight on the TSX if Newmont Mining Corp. is successful in acquiring Goldcorp Inc.

The Canadian dollar traded at an average of 74.70 cents US compared with an average of 74.52 cents US on Monday.

In New York, the Dow Jones industrial average was up 140.90 points at 25,657.73. The S&P 500 index was up 20.10 points at 2,818.46, while the Nasdaq composite was up 53.98 points at 7,691.52.

Despite Tuesday's rally, Jerusalim said he wouldn't be surprised if the market gave back some of its strong gains from earlier in the year.

"I wouldn't put an order of magnitude on it because the valuations are not stretched...and that's what's needed for a big crash so I think any pullback in prices would probably create a decent buying opportunity."