After a day of volatile trading which saw markets surge in the morning and then enter a freefall only hours later, the Toronto Stock Exchange rallied at the eleventh-hour to close in the black Thursday.

After two dismal days, Toronto's S&P/TSX composite index rose 94.50 points to finish the day at 9,331.47.

The final gain comes despite a steep 318-point drop during afternoon trading.

The late day surge, which was led by good news from oil producers and rising fuel stocks, managed to make up for sell offs and instability in the mining industry.

South of the border, ongoing economic uncertainty also led to a rollercoaster ride on the markets.

In New York, the Dow Jones closed up 172.04 points to finish at 8,691.25.

On Wednesday, the Dow dropped 514 points.

Meanwhile, the loonie continued its slide against the U.S. greenback on Thursday, trading at 79.52 cents U.S. after falling 2.69 cents to a three-year low Wednesday.

The dollar closed at 79.70 cents U.S. on Wednesday, and it hasn't been below the 80 cents U.S. mark since 2005.

The falling numbers come after the S&P/TSX composite index lost more than 1,000 points on Tuesday and Wednesday.

"There was a ray of hope today," BNN's Mark Bunting told CTV Newsnet.

"Some cynics might say -- or even technical analysts would say -- this is just delaying the inevitable and we have to go to lower lows on the markets, but we did see some buying throughout the last hour of trading," he said.

Still, Bunting said the economic picture looks bleak as U.S. housing prices continue to slide.

"The bad news just continues," he said, adding that stalwart copy machine company Xerox announced it will slash 3,000 jobs from its global workforce because of economic volatility.

He added that Suncor, a major player in Canada's oil sands development, will also cutback spending this year as oil prices slide.

"They are cutting their spending plan for 2009 by a third, down to $6 billion from $9 billion. They're saying, 'we have to live within our means here,'" he said.

Patricia Lovett-Reid, an economist with TD Waterhouse Canada Inc., said global instability will continue as governments around the world work to ease the credit crunch and get their economies back on track.

"There is so much going on, in terms of a concerted effort by central bankers right around the world to really get more liquidity back into the system," she told CTV Newsnet Thursday afternoon.

"We're seeing it, it's starting to happen, it is working, but ... it is going to take some time."

Lovett-Reid said recent moves by Ottawa to encourage inter-bank lending are also a step in the right direction for Canada's economy.

"The fact is, it's not going to cost us as taxpayers and the bank of Canada is going to actually make money on it when it does get paid back," she said.

"This isn't Wall Street versus Main Street - we are all on the same street."

A slowing economy has also been pushing down oil prices. They rebounded modestly Thursday after dropping more than $5 overnight.

Sweet low crude delivery rose to US$69.25 a barrel on the New York Mercantile Exchange after it hit a 16-month low.

OPEC leaders will meet Friday to decide if they will cut oil production with demand decreasing as the world's economies slow down.