TORONTO - The Toronto stock market closed higher Wednesday as traders weighed the outcome of a summit of European Union leaders amid differences of opinion about tackling the region's government debt crisis.

The S&P/TSX composite index had been in the red for most of the session, but rallied in the last hour to close up 67.48 points to 12,148.73, while the TSX Venture Exchange dipped 3.48 points to 1,539.21.

Helping spark advances was a report by the Japanese news service Nikkei that the Group of 20 was considering a US$600-billion International Monetary Fund lending program for Europe. The IMF later denied the report.

The Canadian dollar lost 0.07 of a cent to 98.98 cents US.

U.S. markets were mainly higher as the Dow Jones industrial average climbed 46.24 points to 12,196.37. The Nasdaq composite index dipped 0.35 of a point to 2,649.21 and the S&P 500 index rose 2.54 points to 1,261.01.

Indexes had been flat for most of the session after a senior German official suggested that European leaders could fail to agree on a plan to tighten the continent's economic ties by the end of the week. Instead, the official said it could take until Christmas for changes to the European Union treaty to be agreed upon, a critical first step in saving the euro.

He added that the government of Chancellor Angela Merkel is insisting on either a substantial change to the treaty governing the 27 EU countries, or an entirely new treaty for the 17 countries that use the euro to centralize decision-making on spending and borrowing for the 17 countries that use the euro.

Herman Van Rompuy, the president of the European Council, had earlier said an easier way to get agreement on future fiscal discipline would be to simply amend existing rules.

The German official dismissed the proposal as a "typical Brussels bag of tricks" that "lag behind both public and market expectations."

The treaty proposal is set to form the basis of discussions at the EU summit in Brussels on Friday. Markets like the treaty idea because investors believe such an agreement would push the European Central Bank to take bolder action to reduce borrowing costs for Italy, Spain and other heavily indebted countries.

"There is no clear path forward, just lots of potential avenues, some of which are quite creative," said John Stephenson, portfolio manager at First Asset Funds Inc.

"But does it mean they're going to be able to successfully pull if off? That's a whole other kettle of fish."

There was little stock market reaction after ratings agency Standard & Poor's placed some of the largest euro-zone banks, including Societe Generale and Deutsche Bank on review for possible downgrades. Earlier in the week, S&P jolted markets in announcing it would review 15 eurozone sovereign ratings.

Traders also looked to the European Central Bank ahead of its next announcement on interest rates Thursday. There are high hopes that the ECB will cut its key rate by 0.25 of a point. Many economists reckon the region is heading towards another recession.

Blue chips led advancers with the financials sector the best performer with Scotiabank (TSX:BNS) ahead $1.14 to $49.03.

But Bank of Montreal (TSX:BMO) was down 59 cents to $57.15. The drop added to a 3.5 per cent slide Tuesday following a disappointing earnings report that had handful of analysts scaling back their recommendations, including Rob Sedran of CIBC Capital Markets who downgraded the stock to sector underperformer.

Laurentian Bank (TSX:LB) gained $1.31 to $44.88 after it increased its dividend for the third time in the past year, up three cents to 45 cents per share. It also said fourth-quarter profit fell to $28.6 million or $1.06 per share from $32.5 million or $1.24 per share a year earlier. Excluding one-time costs, adjusted earnings per share were up six per cent to $1.31.

Telecom stocks also racked up advanced with Rogers Communications (TSX:RCI.B) ahead 41 cents to $37.45.

The TSX energy sector moved slightly lower as price declines in crude accelerated on data showing American crude inventories unexpectedly rose by 1.3 million barrels last week. The January crude contract on the New York Mercantile Exchange fell 79 cents to US$100.49 a barrel. Suncor Energy (TSX:SU) declined 36 cents to $30.51.

The base metals sector was higher while metal prices also backed off with the March copper contract down two cents to US$3.56 a pound. HudBay Minerals (TSX:HBM) was up 31 cents to $10.67.

Industrials also advanced with Canadian Pacific Railway (TSX:CP) ahead 75 cents to $64.50 after it said it is expanding its capacity to transport crude oil from the Saskatchewan portion of the Bakken formation that straddles the Canada-U.S border.

The tech sector stepped back and Research In Motion (TSX:RIM) shares fell 38 cents to $16.80. RIM has been forced to change the name of its new BBX smartphone operating system after a U.S. judge ruled that the name has already been trademarked by a software company in New Mexico. The Waterloo, Ont.-based tech company has been hyping the new system for months. The system will now be called BlackBerry 10.

Gold stocks were higher while bullion prices headed up with the February contract in New York up $13 to US$1,744.80. Agnico-Eagle Mines (TSX:AEM) gained 29 cents to $44.15.

In other corporate news, pipeline and gas systems operator Veresen Inc. (TSX:VSN) has struck a deal with gas giant Encana Corporation (TSX:ECA) to buy the Hythe/Steeprock midstream gas gathering and processing complex for $920 million. EnCana shares gained 35 cents to $20.48 while Veresen edged up two cents to $14.66.

Dollarama Inc. (TSX:DOL) shares gained $1.07 to $41.39 after it reported that third-quarter net earnings grew to $41.8 million from $31.3 million a year ago. Sales increased 12.5 per cent to $400.3 million, helped by its opening of 10 new stores in the period, or 51 stores since a year earlier.