CANADA STOCKS-TSX edges toward six-month high

Fri Feb 24, 2012 1:09pm EST

* TSX up 20.60 pts, or 0.2 pct, at 12,751.88

* Highest level since Sept. 1, 2011

* Energy gains pared by gold miners

* U.S. housing data mixed

By Jon Cook

TORONTO, Feb 24 (Reuters) - Toronto's main stock index edged closer to a six-month high at midday on Friday as higher oil prices boosted oil and gas issues, but gains were limited by a slump in gold miners and soft U.S. housing data.

Most of the index's 10 main sectors rose on Friday, led by oil and gas producers, which climbed 0.3 percent as Brent crude rose towards $124 a barrel on concern over cuts in Iranian oil supply. Brent has risen more than 11 percent so far this month.

Suncor Energy led the group, rising 1.7 percent to C$37. Nexen Inc shares climbed 2.1 percent to C$21.30 after the energy producer said oil production began at its Usan field in offshore West Africa.

Strong corporate earnings also helped keep the index in positive territory. Shares of Magna International Inc, one of the world's biggest auto parts manufacturers, rose 7 percent to C$48.15 a day after it reported a big jump in quarterly earnings and increased its dividend by 10 percent.

Eldorado Gold was up 1.8 percent at C$15.13 after the gold miner reported a more than 50 percent increase in its 2011 earnings from operations.

Despite Eldorado's rise, the gold mining sector slumped 1 percent as bullion retreated from the three-month high it hit on Thursday.

Sector heavyweights Barrick Gold and Goldcorp both slid 1 percent, Barrick to C$48.95 and Goldcorp to C$48.82.

"Even though there's good individual news the more general concerns are holding (the market) back a little," said Gavin Graham, president at Graham Investment Strategy

At midday, the Toronto Stock Exchange's S&P/TSX composite index was up 20.60 points, or 0.2 percent, at 12,751.88, its highest level since Sept. 1, 2011.

Iamgold Corp shares plunged 7.4 percent to C$16.20 after the gold producer reported an increase in quarterly net profit on Thursday, but said adjusted earnings from continuing operations fell 9 percent and costs rose 20 percent.

The gold price has risen more than 13 percent this year, but its safe-haven status over the last few months has been hurt as fears about the European and U.S. economies have waned.

Markets were gearing up on Friday for a second three-year financing operation by the European Central bank next week, which is expected to provide nearly half a trillion euros of cheap cash and ease concerns about bank funding.

The ECB move could hurt gold prices, Graham said, adding it "may help stimulate growth and therefore the threat of deflation is reduced so you don't need a safe haven as much."

Mixed U.S. economic data also muddied the market waters. Data on Friday showed new U.S. single-family home sales fell in January, but an upward revision to the December data and a drop in the supply of properties added to signs of an overall recovery.

Financial issues rose 0.3 percent, led by Toronto-Dominion Bank, which was up 0.7 percent at C$79.57 after UBS raised its price target on the stock.

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