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TSX up 1.4%

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Materials drive gains, up 2.4%

(Updates to close)

By Nikhil Sharma and Nivedita Balu

July 10 (Reuters) - Canada's main stock index rose on

Wednesday, boosted by gold shares, ahead of U.S. economic

reports which could provide further clues on the Federal

Reserve's monetary policy path.

The Toronto Stock Exchange's S&P/TSX composite index

closed up 307.73 points, or 1.4%, at 22,350.23.

Materials led sectoral gains, rising 2.2%. They

tracked spot gold prices which rose on a stronger case

for U.S. interest rate cuts sooner.

South of the border, the S&P 500 crossed 5,600 for

the first time as Fed Chair Jerome Powell's comments this week

boosted expectations for a rate cut in September.

Powell

said

in his second day of congressional testimony that he was

not ready to conclude that inflation was moving sustainably down

to 2%, although he expressed "some confidence of that."

"It's a good balancing act ... and that has given some

support to the commodities and also to gold, which continues to

do well, even in the face of stronger US dollar," said Greg

Taylor, chief investment officer of Purpose Investments.

Taylor said TSX could be set up for a better second half

of the year as tech names drive the US market higher, leaving

room for Canadian stocks to catch up.

Heavyweight energy shares rose 1.2%, while the

financial and consumer discretionary

sectors rose 0.9% and 1.2% respectively.

To evaluate the trajectory of interest rates, markets will

closely watch the U.S. consumer price index due on Thursday and

producer price index data scheduled for Friday.

Separately, hopes of another rate cut from the Bank of

Canada at its July 24 meeting are high, after the last jobs

dataset showed Canadian unemployment at a 29-month high.

"(A) quick rise in unemployment could lead to a negative

impact on the economy and a significant drop off in consumer

spending," said Graham Priest, investment advisor at BlueShore

Financial.

Among individual stocks, Orla Mining ( ORLA ) gained 2%

after the miner reported second-quarter operational results.

An 18-day strike at business jet maker Bombardier's

manufacturing facilities in Mississauga and Waterloo

ended after members ratified a new contract. Its shares were up

7.5%.