The Toronto stock market started the second half of the year on a strong note, racking up solid gains based on positive economic data from the U.S. and higher gas and oil prices.

The S&P/TSX composite index gained 85.62 points to close at 13,386 on Monday. The TSX Venture Exchange went up 17.73 points to 1,921.91, while the loonie was up 0.4 of a cent from Thursday's close to 104.08 cents US.

The U.S. stock market was closed Monday for Independence Day. New York markets finished Friday with strong gains.

The market has changed little since the start of the year and there are high hopes that the second half of 2011 will have strong yields for investors.

"Economic data is going to steadily improve... and I think corporate profits are still going to be quite strong," Norman Raschkowan, North American strategist at Mackenzie Financial Corp, told The Canadian Press.

But he added that next year doesn't look very optimistic because "I think earnings growth is going to start to decelerate and you probably are going to revisit Greece and all these sort of other macro issues on an ongoing basis."

August oil contract prices gained six cents to US$95 a barrel Friday and the TSX energy sector went up 0.89 cents.

The mining sector was up by 2.47 per cent, while gold stayed flat.

The tech sector had gains as Canada's Research In Motion went up 42 cents to $28.30.

Friday's U.S. manufacturing report showed activity had picked up unexpectedly and that is good news for investors, particularly because the U.S. economy went soft during the second quarter.

Investors have been worried by the European debt crisis, and in particular, that Greece could default on its massive debt.

But last week's approval of austerity measures in Greece improved market sentiments.

However, there were more concerns Monday, this time that a French proposal to get banks involved in helping Greece would lead to the country defaulting on its debt.

Standard & Poor's concerning note came a week after French banks said they would help Greece accept a major debt rollover. German banks made similar statements.

"I think the note from S&P reaffirms that for the markets that what we saw last week was just simply the first step in what's going to be a long process," Raschkowan said.

"Greece has to get its next installment from Europe and the IMF in September now that the July payment has sort of been approved. And we're going to go through this review process all over again, and the EU may determine that Greece hasn't made the progress over the summer that they were expecting and they want more. Who knows?"

With files from The Canadian Press