The Canadian Press

The Toronto stock market registered a solid gain Friday amid signs from the retail sector that suggested the American economy is continuing its slow and steady recovery.

The S&P/TSX composite index gained 63.31 points to 12,176.84 while the TSX Venture Exchange climbed 27.71 points to 1,680.57.

Investors were encouraged by reports Thursday that discounter Target Corp., department store Macy’s Inc., clothier Gap Inc. and Limited Brands Inc., parent of Victoria’s Secret, posted double-digit increases in March sales that beat analysts’ expectations.

Overall, sales in stores open at least a year rose 9% in March, based on an index of 31 retailers compiled by the International Council of Shopping Centres.

“That was key because we had a very disappointing consumer credit number this week, so that retail report was very timely,” said Andrew Pyle, investment adviser at ScotiaMcLeod in Peterborough, Ont.

Pyle was referring to data on Wednesday showing that U.S. consumer borrowing declined by US$11.5 billion in February, surprisingly weaker than the small, $500-million gain that economists had expected.

“Consumers are coming out of it, starting to spend a little bit more,” he said. “(But) I just don’t think we’re going get huge growth in consumer spending without the unemployment rate falling and it hasn’t fallen that much.”

The TSX energy sector was ahead 0.5% even as oil lost early gains after news that Fitch Ratings had downgraded Greece’s debt to the lowest ring of investment-grade ratings, BBB-.

Greece’s finance minister attempted to reassure markets Friday, saying key aspects of a previously agreed rescue plan by eurozone countries and the International Monetary Fund were being hammered out, even as he insisted no bailout was needed.

The May crude contract on the New York Mercantile Exchange fell 47 cents to US$84.92 a barrel. But energy stocks were lifted after Chevron Corp. said it expects first-quarter profit to be higher than the previous quarter, driven by higher earnings from its production and exploration operations, which are benefiting from higher commodity prices.

The announcement was good news to investors looking to the start of the U.S. first-quarter earnings season next week. Imperial Oil (TSX:IMO) gained 46 cents to $41.72 and Husky Energy (TSX:HSE) was up 37 cents at $30.12.

Other commodity prices also picked up, with the June gold contract on the Nymex ahead $9 to US$1,161.90 an ounce. The materials sector gained 1.13% as Barrick Gold (TSX:ABX) climbed 39 cents to $41.49 while Kinross Gold improved 30 cents to $18.67.

The base metals sector rose 1.46% as the May copper contract in New York was unchanged at US$3.59 a pound. Teck Resources (TSX:TCK.B) advanced 81 cents to $46.03 while Labrador Iron Mines Holdings (TSX:LIM) gained 27 cents to $7.05.

Metallurgical coal miner Cline Mining Corp. (TSX:CMK) jumped 39 cents or 22.29% to $2.14.

Further signs of increasing U.S. consumer activity helped balance a Canadian employment report for March that disappointed. Statistics Canada reported that the economy created just under 18,000 jobs last month, lower than the 25,000 that had been expected.

The unemployment rate remained unchanged at 8.2%.

The Canadian dollar fell back from just above parity with the greenback following the report, down 0.12 of a cent to 99.6 cents US.

The loonie reached parity on Tuesday for the first time since July 2008 but has had trouble regaining that perch since, partly due to strength in the U.S. dollar as a safe haven currency amid renewed worries about the Greek debt crisis.

Investors also took in major dealmaking in the North American retail sector. Convenience store operator Alimentation Couche-Tard Inc. (TSX:ATD.B) is making a US$1.8-billion cash hostile takeover bid for Casey’s General Stores Inc., which operates primarily in the U.S. Midwest. Its shares gained 70 cents to $18.90.

And Research In Motion (TSX:RIM) is buying QNX Software Systems from Harman International (NYSE:HAR). The companies didn’t disclose what RIM is paying for QNX, an Ottawa-based company with technology that helps bring the Internet to cars. RIM shares added 45 cents to $70.25.

New York markets also climbed with the Dow Jones industrial average ahead 70.28 points to 10,997.35.

The Nasdaq composite index was up 17.24 points at 2,454.05, and the S&P 500 index gained 7.93 points to 1,194.37.

North American markets made modest gains this past week with investors anxiously awaiting the start of the first-quarter earnings season. Aluminum giant Alcoa kicks off earnings Monday.