Source: The Canadian Press

The Toronto stock market clawed its way into positive territory at the end of the trading day Thursday as investors took advantage of earlier declines to snap up some deals.

The S&P/TSX composite index gained 26.31 points to 12,160.87 after a triple-digit slump earlier in the day caused by persistent European debt problems and some disappointing earnings.

“You’ve got worries all over the place,” said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver.

Although the majority of first-quarter results reported so far have exceeded expectations, Mastracci said most businesses are still relying on cost-cutting rather than sales growth to boost their bottom lines.

“They don’t have what I call the ‘wow factor,’ hitting the ball out of the park,” he said. “Businesses just have not been able to increase their revenues very much.”

Also putting pressure on markets Thursday was a report from the European Union’s statistics office showing that Greece’s deficit in 2009 equalled 13.6% of its economic output _ even more than previously thought. This led rating agency Moody’s to downgrade Greece’s debt.

Meanwhile, at 10.9% of gross domestic product, Britain posted its largest annual budget deficit since the Second World War. Ireland had the highest deficit across the 27-country EU at 14.3% of GDP.

The Canadian dollar slipped 0.08 cent to exactly US$1 after earlier falling below parity as worried investors fled to the perceived safe haven of the American greenback.

On the TSX, the base metals sector was the biggest gainer, adding 0.89% as the May copper contract on the Nymex slipped 4.85 cents to US$3.49 per pound. Shares in Teck Resources Ltd. (TSX:TCK.B) jumped $2.28 or 5.5% to C$43.99 after the company said it would reinstate its dividend at an annual rate of 40 cents per share.

The energy sector gained 0.33%, overcoming earlier losses as the June crude contract on the New York Mercantile Exchange edged up two cents to US$83.70 a barrel. Shares in Encana Corp. (TSX:ECA) added 25 cents to C$31.99.

The June contract for gold bullion on the Nymex fell $5.90 to US$1,142.90 an ounce. Goldcorp Inc. (TSX:G) gained 34 cents to C$39.87.

The financial sector was flat. Royal Bank of Canada (TSX:RY) stock edged up 22 cents to C$61.78.

The TSX Venture Exchange gained 4.55 points to 1,652.05.

In New York, stocks also managed to reverse earlier declines as some bright earnings and news that U.S. home sales rose more than expected in March offset some disappointing quarterly reports and higher-than-forecast jobless claims.

The Dow Jones industrial average added 9.37 points to 11,134.29. The S&P 500 gained 2.73 points to 1,208.67, while the Nasdaq climbed 14.46 points to 2,519.07.

In economic news, Bank of Canada governor Mark Carney said Thursday the pace of economic growth in Canada has already begun to slow.

He said the housing sector will become a negative influence on growth by next year, and the withdrawal of government stimulus, along with the high Canadian dollar and continued low demand in the United States, will be a further drag on the economy.

Meanwhile, Statistics Canada reported that the number of people who received regular Employment Insurance benefits in February was virtually unchanged from the previous month. The number of people receiving regular EI benefits has declined by 130,500 since the peak of 829,300 last June.

In Canadian corporate news, Precision Drilling Trust (TSX:PD.UN) said its first-quarter profit improved a smaller-than-expected 8% from a year ago to C$62 million as oil well activity exceeded expectations. Shares in Precision gained eight cents to $7.73.

Celestica Inc.’s (TSX:CLS) first-quarter profit was up nearly 35% from a year ago, although its adjusted earnings improved less than analysts expected. Shares in the Toronto-based contract manufacturer, which makes products in factories around the world for brand-name companies, added 13 cents to $10.55.

Cenovus Energy Inc. (TSX:CVE) said an independent analysis had confirmed that the oilsands company has between 3.9 billion and 7.3 billion barrels of bitumen reserves, before royalties. Shares in Cenovus lost 56 cents to $28.54.

And shares in Enerchem International Inc. (TSX:ECH) jumped 83 cents or more than 44% to $2.70 after it announced it had received a takeover offer from an unnamed private Canadian company in a $41.6-million all-cash deal.