TORONTO - Rising energy stocks helped the Toronto stock market claw back a chunk of Thursday's slide of almost three per cent.
New York indexes were also higher going into the Memorial Day long weekend, as investors set aside some of their worries about the U.S. government's credit rating.
Toronto's S&P/TSX composite was off an earlier triple digit rise but still up 63.5 points to 10,013.1, after tumbling 282 points the previous day when markets were unnerved by word that Britain may lose its AAA credit rating because of swelling government debt.
Traders worry that the United States and other big economies could face similar problems, as governments try to spend their way out of recession.
American-dollar weakness helped push the Canadian dollar ahead 1.39 cents to 89.26 cents US, its strongest level since early October.
"The U.S. dollar is weaker every day because everyone is worried about this printing of money, and clearly that's the only way I can see that they can get out of this mess -- debase the currency," said John Stephenson, portfolio manager at First Asset Funds.
The loonie has gained about 4-1/2 cents over the past week against the greenback, which fell Friday to a four-month low against the euro.
Statistics Canada reported retail sales rose 0.3 per cent in March. It was the third consecutive monthly increase, although less than the 0.5 per cent climb economists had expected.
"But before breaking out the bubbly and declaring the recession over for consumers, note that the recent modest gains follow a huge drop at the end of last year (when sales tumbled five per cent in the month of December alone)," observed BMO Capital Markets economist Doug Porter.
"Even with the three-month string of gains, sales are still down 4.8 per cent from year-ago levels."
The TSX Venture Exchange was off a tenth of a point to 1,089.75.
Wall Street's Dow Jones industrial average was 42.5 points higher to 8,334.7.
The Nasdaq composite index gained 7.34 points 1,702.59 to while the S&P 500 climbed 3.75 points to 892.1.
Investors found some room for optimism after U.S. banks reduced borrowing from the Federal Reserve's emergency loan program over the past week. Investment firms didn't borrow at all -- the first week that's happened since early September, seen as a sign that some credit stresses are easing.
On the TSX, Magna International (TSX:MG.A) rose 65 cents to $37.66 after the governor of the German state where General Motors' Opel unit is based indicated that he favours a bid by the Canadian auto parts maker for the European auto maker. Magna, Italy's Fiat SpA and New York-based buyout firm Ripplewood Holdings LLC submitted plans Wednesday to GM. Details of the bids have not been released.
The TSX energy sector rose 1.1 per cent. The June crude contract on the New York Mercantile Exchange gained 12 cents to US$61.17 a barrel after losing almost a dollar Thursday. Petro-Canada (TSX:PCA) gained $1.18 to C$44.30 while EnCana Corp. (TSX:ECA) declined 65 cents to $58.11.
The Toronto base metals sector moved up 2.5 per cent. Teck Resources (TSX:TCK.B) rose 73 cents to $15.87.
The gold group was flat as the June bullion contract in New York moved up $7.70 to US$958.90 an ounce. Barrick Gold Corp. (TSX:ABX) gained 76 cents to $42.73
High River Gold Mines Ltd. (TSX:HRG), a troubled Toronto miner with operations in Russia and Africa, tumbled five cents to 18 cents after it said Russia's OAO Severstal plans to offer 18 cents per share to minority shareholders.
The financial sector was up a slight 0.3 per cent as investors look ahead to earnings reports coming down from four of the big Canadian banks next week.
CIBC (TSX:CM), which reports on Thursday, fell 58 cents $53.62.
The TSX financial sector has surged about 50 per cent since March 9.
Shares in Manulife Financial Corp. firmed up 51 cents to $21.90 as Ottawa announced it is launching a facility that will provide wholesale term borrowing for federally regulated life insurance companies in the event of a financial market freeze-up.
Indigo Books & Music Inc. (TSX:IDG) gained 49 cents to $12.50 as it declared its first dividend. Sales increased four per cent in its latest quarter, but profit weakened.
Sino-Forest Corp. (TSX:TRE), which runs tree plantations in China, toppled $1.47 to $11.34 after announcing an issue of 30 million shares for $330 million.
