Toronto stock index set to punch higher

TORONTO, May 18 (Reuters) - Toronto stocks were positioned to push further into record territory on Friday fueled by merger and acquisition news.

Internationally, U.S. stock futures rose as investors drew support from news that industrial conglomerate General Electric (GE.N) is close to selling its plastics unit for $11 billion.

In Europe, shares were higher on deal speculation including a possible major tie-up between oil companies BP and Shell, as bank stocks and Cadbury were lifted by similar merger and acquisition chatter.

The S&P/TSX composite index .GSPTSE pushed 0.5 percent higher on Thursday, setting a record high close of 14,100.71 as energy issues were lifted along with strong oil prices.

The benchmark index climbed to a record high for the second straight day as strength in the oil patch offset weakness in mining issues and news of bigger commodities trading losses at Bank of Montreal (BMO.TO).

"I keep expecting a pull back of bigger magnitude, but I think there's enough cash on the sideline that any pullback is being greeted with buying," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

"Overall what I like about the market is it's not a one-sector story, it's a broad-based story and I think that's very healthy ... the underlying strength of the stock market is appealing."

BCE Inc. (BCE.TO) continues to make headlines. Canada's Globe and Mail newspaper said private equity company Cerberus Capital Management is courting Shaw Communications (SJRb.TO) and CanWest Global Communications CGS.TO to join a possible bid. Cerberus needs Canadian partners to sidestep foreign ownership limits on the telecoms firm, sources told the paper.

In corporate news, Rothmans Inc. ROC.TO, Canada's second biggest cigarette maker, reported a bigger fourth-quarter profit on Friday, reflecting price increases across its product line.

Precision Drilling Trust (PDS.N) cut its May cash distribution by 31.6 percent to 13 Canadian cents a unit, due partly to a competitive pricing environment.

After the bell on Thursday, BlackBerry maker Research In Motion (RIM.TO) said its earnings restatement was complete and the impact on fiscal 2007 earnings was not material. Earnings for the year to March 3 filed under U.S. accounting standards were $3.31 per share, from a previously-reported $3.33.

Precious metals producers could see gains as buyers returned to the bullion market.

($1=$1.09 Canadian)