TORONTO - Toronto's main index finished higher Wednesday, but backed off earlier triple-digit gains, as questions about the direction of the global economy weighed on markets.

The S&P/TSX composite index rose 31.98 points to 9,279.15, after climbing as much as 164 points in the afternoon.

The International Monetary Fund is projecting a 1.3 per cent drop in global economic activity this year, the first decline in six decades.

The new forecast of a decline in global economic activity for 2009 is much weaker than the 0.5 per cent growth the IMF had estimated in January.

"From an economic point of view we're still in very unclear times," said Duncan Anderson, portfolio manager at MFC Global Investment Management.

"You've had a slew of companies (who) in their quarterly releases have been talking about how things appear to be bottoming, but then you have other companies who have taken the opposite view."

The Canadian dollar moved down 0.24 cent to 80.65 cents U.S., and Statistics Canada reported its composite leading index fell 1.3 per cent in March, another contraction as the manufacturing sector faced widespread cutbacks.

The TSX Venture Exchange fell 4.74 points to 979.12.

Trading was volatile on both sides of the border as Wall Street climbed out of the red near midday only to tumble back into losses after a mixed bag of news, including a boost of confidence from Treasury Secretary Timothy Geithner and worries about the banking sector.

Geithner told the Economic Club of Washington that the downturn is showing signs of moderation, though he emphasized the G20's need to continue their stimulus efforts.

The Dow Jones industrial average lost 82.99 points to 7,886.57.

In the U.S. banking industry, Morgan Stanley reported a deeper-than-expected loss and reduced its dividend. The banking giant was hurt by the deteriorating commercial real estate market. The loss of 57 cents per share for the January-March period was wider than a loss of eight cents a share analysts had expected.

Capital One reported a US$176.1 million first-quarter loss on increasing credit losses. The bank and credit card company also set aside more money for bad loans, and said a measure of losses in all of its businesses likely will be higher in 2009 than the $8.6 billion it previously projected.

And Wells Fargo & Co., which bought Wachovia last fall at the height of the credit crisis, said it earned $2.38 billion. That compares with a profit of $2 billion a year earlier.

The Nasdaq composite index was ahead 2.27 points to 1,646.12, while the S&P 500 index slipped 6.53 to 843.55.

On the TSX, gold stocks were up 0.9 per cent, as the June bullion contract in New York rose $9.80 to US$892.50 an ounce.

The TSX energy group led gains, 1.7 per cent higher, as the June crude contract rose 30 cents at US$48.85 a barrel on the New York Mercantile Exchange.

The U.S. Energy Information Administration said that crude inventories rose by 3.7 million barrels to 370.6 million barrels, which is the highest level in nearly 19 years.

In Canada, EnCana Corp. (TSX:ECA) topped expectations as its first-quarter profit soared to US$962 million or $1.28 per share, from $93 million a year ago. Its shares were up $2.21 to $54.92.

Precision Drilling Trust (TSX:PD.UN) reported a first-quarter net profit of $57 million, down 46 per cent from a year ago amid an "unprecedented" slump in oilpatch activity. Its units closed 32 cents higher to $5.55.

Toromont Industries Ltd. (TSX:TIH) booked a record 44 per cent year-over-year increase in first-quarter profit to $23.7 million as revenue rose to $457.7 million despite lower booking activities. Shares of the company ended up 91 cents at $24.90.

Canwest Global Communications Corp. (TSX:CGS) gained four cents to 28 cents after the media conglomerate arranged another reprieve from lenders and noteholders, this time until May 5.

Clothing retailer West 49 Inc. (TSX:WXX) dropped to an $8.5-million net loss in its latest quarter, and also said it was in violation of a bank covenant at the end of the quarter, though it has obtained a waiver until June 30. The company expects to violate another covenant when the current quarter closes at the end of this month. Shares lost 55 cents to close at 31 cents.