TSX edges higher

The Canadian dollar failed to catch a lift from higher oil and metal prices, down 0.21 of a cent at 100.03 cents US.

The April crude contract on the New York Mercantile Exchange gained $1.9 to US$109.7 a barrel, its highest level since May 3, 2011.

Crude oil had advanced more than $1.50 on Thursday amid data showing the number of Americans seeking unemployment benefits last week was unchanged and that the four-week average was the lowest in four years. Other data showed house prices rising at the end of last year.

But Iran has been widely responsible for crude jumping from $96 earlier this month amid growing tension over the country’s nuclear program and fears global crude supplies could be disrupted. Some analysts believe that economic sanctions by the United States and Europe and countermeasures by Iran will help keep crude prices elevated this year.

That has led to increasing concern that a continuing run-up in oil prices could threaten the fragile economic recovery in the U.S. and deepen a recession in Europe.

“It does start to become worrisome,” said Jim Muir, director at Fraser Mackenzie.

“In the short run, I don’t think it’s enough to stall any economic recovery in the U.S. But don’t forget, the price is higher in Europe where the economy is definitely getting into a stall on its own. This can only serve to help that stall.”

New York indexes were also little changed amid positive housing sector news and data showing rising consumer confidence.

New York’s Dow industrials slipped 1.74 points to 12,982.95. The Nasdaq composite index was 6.77 points higher to 2,963.75 while the S&P 500 index was ahead 2.28 points at 1,365.74.

New home sales were down by 0.9% in January to a seasonally adjusted annual rate of 321,000. That followed four straight months of gains in which home sales rose 10%. The gains came after the government upwardly revised October, November and December’s figures. December’s annual sales pace of 324,000 was the highest in a year.

Meanwhile, the widely watched University of Michigan’s consumer sentiment index rose to 75.3 in February, the highest reading in a year and up from a January reading of 75.

“We are in a recovery phase, there’s no question about it,” Muir said. “There’s a lot of things that are going the right way.”

The TSX energy sector was up 0.19%. Suncor Energy (TSX:SU) gained 58 cents to C$36.97 and Nexen (TSX:NXY) shares gained 32 cents to $21.18 after the energy company said Friday that oil has been produced at the Usan offshore field near West Africa. The Calgary-based company holds a 20% working interest in the project.

Metal prices also advanced amid speculation that local governments in China would relax restrictions on the property market and monetary authorities would tweak policy to stimulate growth.

Copper prices rose about four per cent this week after the People’s Bank of China announced last weekend it was lessening reserve requirements at banks to encourage lending. China is the world’s biggest consumer of copper, viewed as an economic barometer as it is used in so many businesses.

The base metals sector gained 0.47% as the March copper contract edged six cents higher to US$3.86 a pound. Ivanhoe Mines (TSX:IVN) ran up 19 cents to C$17.52 and Lundin Mining (TSX:LUN) gained 15 cents to $5.22.

The gold sector was the biggest drag amid mixed earnings news and lower gold prices. Bullion prices pulled back as the April contract shed $9.90 to US$1,776.40 an ounce.

Eldorado Gold Corp. (TSX:ELD) said profits nearly doubled to $88.8 million in the fourth quarter as the company benefited from higher prices. Revenues grew to $303.3 million from $213 million and its shares gained 19 cents to C$15.05.

Iamgold Corp. (TSX:IMG) on Thursday reported an eight per cent jump in fourth-quarter profits on the back of higher gold prices. Net earnings were $133.6 million, or 36 cents, compared to $124.1 million, or 33 cents in the same 2010 period. Revenues were $481.6 million, an increase from $440.9 million, primarily due to a 19% rise in realized gold prices. However, its shares were down $1.60 or 9.14% to $15.90.

Auto parts giant Magna International (TSX:MF) provided some TSX support. Its shares jumped $2.41 or 5.36% to $47.36, having reported after the market close Thursday that it would raise its dividend 10% to 27.5 cents a share. The company also posted quarterly net profits that nearly doubled from a year ago to US$312 million, or $1.32 per share.

Over the weekend, investors will be interested in what transpires at a meeting of the G20 finance ministers and central bank governors in Mexico. While the gathering will focus on promoting global economic stability and growth, Europe’s debt crisis will remain a key topic.

In particular, European officials will press for countries like the U.S., China and the U.K. to allow the International Monetary Fund to contribute more money to eurozone rescue measures. Several countries are reluctant to expose the IMF to more risk in Europe.