Financial issues powered Toronto stocks higher Friday. The TSE 300 composite index gained 81.50 points to close at 7,899.60.

Canada’s biggest stock exchange gained 2.2% on the week.

Overall, 12 of the TSE’s 14 sub-indices gained ground Friday, led by a 2.21% rise in the heavily-weighted financial services sector and a 1.5% gain for gold stocks.

Industrial products, home to many tech stocks, finished flat on the day. Nortel slipped 4 cents to $6.29.

Bank of Nova Scotia gained $1.75 to $55.75. The bank shut the doors on its Argentine subsidiary Friday after Scotiabank and the Argentine central bank said they would not put new money into the bank.

Royal Bank advanced $1.50 to $56.90.

Air Canada slipped 4¢ to $6.46 as it announced the new name for its western-based no-frills airline — Zip. Rival WestJet fell 45¢ to $30.85.

Falconbridge rose 68¢ to $20.68 on the strength of an upbeat earnings report.

Fresh U.S. warnings of possible attacks against U.S. financial institutions coupled with ongoing tensions in the Middle East served to drive Canadian gold stocks higher.

Barrick Gold rose 35¢ to $28.70, while Placer Dome closed up 20¢ at $19.

Market momentum was positive as 602 issues advanced and 477 declined. Volume was 177.6 million shares.

The TSX Venture Exchange rose 7.12 to 1,167.01. Trading was heavy on a volume of 44.2 million shares.

On Wall Street, blue-chips cruised to a higher close Friday as investors reconsidered Microsoft’s second quarter and sifted through the latest deluge of earnings news.

While tech stocks suffered moderate losses, Microsoft shares rose US83¢ to US$57.20. That was a bit of a surprise as the company reported its Q3 profits came in below analysts’ expectations and it lowered its Q4 earnings outlook. But several analysts upgraded the company.

The Dow Jones industrial average finished up 51.83 points to 10,257.11. The Nasdaq composite index fell 5.60 points to 1,796.83, and the S&P 500 lost less than a point to 1,125.17.

Tuesday’s interest rate hike by the Bank of Canada continued to support the Canadian dollar. It gained US0.17¢ to US63.65¢, a new high for 2002 and its strongest close since December17.