Markets in Canada and the U.S. closed Monday mostly flat, but the trend for the quarter was positively bullish.

In Canada, the S&P/TSX composite index gained 4.02 points or 0.06% to 6983.14, while the TSX Venture Exchange was up 4.02 points to 1103.89. Canadian markets are closed Tuesday for the Canada Day holiday.

The S&P/TSX composite was up 5.57% the first half of the year, a far cry from the 7% drop in the same period last year. The energy sector advanced almost 1% on Monday to lead all sectors, while the consumer discretionary sector rose 0.6%. Five of the TSX’s 10 sub indices were higher on Monday.

In Canadian news Monday, only two of the major banks — RBC Financial Group and Bank of Nova Scotia — were up.

Elsewhere, Montreal-based Desjardins Trust declared a dividend payment of $0.21695 per share on series “1” preferred shares, payable on July 15, 2003 for shareholders of record as of July 4. The annual dividend rate for the quarter ending July 15 is 3.47%, which is 70% of the average prime rate of the Caisse centrale Desjardins and two banks.

RBC economist Carl Gomez said while there is no Canadian economic news this week, market watchers will have eye on two big releases next week — housing starts on Wednesday and the employment report on Friday.

The employment report will be an important one for the Bank of Canada, which will be making an important announcement on interest rates four days later, Gomez said in a report Monday. “The prevailing view among market watchers is that the Bank of Canada will remain on hold, keeping the policy rate steady at 3.25% though a materially weak employment report would increase the odds of 25 basis point cut. Still, the question of the durability of Canada’s current period of economic softness remains a key question mark on the rate outlook. “

In the U.S. on Monday, major markets slipped slightly, but not nearly enough to mask the positive trend this year. The Standard & Poor’s 500 slipped 1.72, or 0.2%, to 974.50. The Dow Jones industrial average lost 3.61 to 8985.44. The Nasdaq composite index shed 2.45, or 0.2%, to 1622.81.

For the S & P 500 index, the quarterly advance was the biggest since the end of 1998, as investors anticipate corporate profit growth will accelerate in the second half of the year. The index jumped 15% in the quarter, its biggest such rally since the last three months of 1998. Some investors are betting the lowest interest rates in 45 years and a $350 billion package of federal tax cuts will spur spending by consumers and businesses.

“We are living with a modest economic recovery that should enable stocks to continue to move up,” one trader told Bloomberg.

The Dow gained 12% since the end of March, while the Nasdaq composite rose 21%.