TORONTO - The Toronto stock market extended its winning run to seven sessions Thursday amid a trio of solid earnings reports from the gold sector and positive U.S. economic news.

The S&P/TSX composite index closed up 59.35 points to 11,694.84 taking the TSX index up 5.2 per cent since Feb. 8 as commodity prices gained ground while fears of a debt default by Greece seemed to ease somewhat.

But analysts say the issue continues to weigh on investor sentiment.

"If a deal for Greece is not done, if the negotiations break down, I don't even want to think about what will happen there," said Paul Thornton of Investor Boot Camp Online.

"Many people are aware of that but the market is acting like a deal is going to be done -- so that's the risk."

Investors also took in major dealmaking in the financial sector. Fairfax Financial Holdings Ltd. (TSX:FFH) announced it will buy the rest of Zenith National Insurance Corp. (NYSE:ZNT) in a transaction that values the California-based workers' compensation insurance specialist at about US$1.4 billion.

Toronto-based Fairfax will pay US$38 per share for the stock in Zenith it doesn't already own. Fairfax shares were up $7.29 to C$374.99 while Zenith shares surged $8.97 to US$37.88 in New York.

The Canadian dollar was ahead 0.34 of a cent to 96.02 cents US as Statistics Canada reported that the consumer price index shot up more than half a point to 1.9 per cent last month. It was the largest increase in more than a year but in line with expectations.

On Thursday, the March crude contract on the New York Mercantile Exchange gained $1.73 to US$79.06 a barrel even as the U.S. Energy Department said crude inventories rose by 3.1 million barrels last week.

However, distillates fell by 2.94 million barrels, far greater than the 1.6 million barrels that analysts had forecast.

The energy sector climbed 0.54 per cent. EnCana Corp. (TSX:ECA) was up 40 cents to C$34.95.

Nexen Inc. (TSX:NXY) reported a $259-million net profit in the fourth quarter, a turnaround from the $181-million loss that the oil and gas producer experienced a year earlier. Nexen shares gained 43 cents to $23.54.

The tech sector was the leading group, up 1.9 per cent with Research In Motion Ltd. (TSX:RIM) up 78 cents to $74.34.

The base metals sector was up 1.52 per cent with the March copper contract in New York ahead five cents to US$3.29 a pound. Teck Resources (TSX:TCK.B) advanced 44 cents to $39.59 while First Quantum Minerals (TSX:FM) gained $3.85 to C$79.57.

The April bullion contract on the Nymex slipped $1.40 to US$1,118.70 an ounce, but the gold sector on the TSX rose 1.04 per cent.

Barrick Gold (TSX:ABX) said Thursday that fourth-quarter operating profit came in at US$215 million, reversing a year ago loss of US$468 million amid stronger gold prices. It also reported that it was spinning off its African assets into a new publicly traded company to be called African Barrick Gold. Revenue jumped 13 per cent to U$2.36 billion. Its shares were up $1.29 on the TSX to C$40.94.

Agnico-Eagle Mines Ltd. (TSX:AEM) shares gained 98 cents to C$62.87 after it said its fourth-quarter earnings more than doubled to US$47.9 million. It also said Wednesday that revenue soared to US$232 million compared with US$36.4 million in 2008 when the company suffered a writedown on the sale of available securities of US$39.2 million.

Shares in Kinross Gold Corp. (TSX:K) advanced 33 cents to C$19.68 as the miner said it earned US$235.6 million in its latest quarter compared with a loss of $968.8 million a year ago while its revenue grew by more than 40 per cent.

"The gold sector is very healthy," added Thornton.

"Gold is still one of the better markets anywhere. And as a group, commodities and the stock market are in the early days of resuming the uptrend from what was, in the stock market, a relatively short correction (from mid-January to early February)."

The TSX Venture Exchange moved up 4.96 points to 1,523.68.

New York markets were higher amid mixed earnings and economic data.

The Dow Jones industrial average moved 83.66 points higher to 10,392.9. The Nasdaq composite index rose 15.42 points to 2,241.71 while the S&P 500 index was up 7.24 points to 1,106.75.

Investors were encouraged by a report from the Philadelphia Federal Reserve which said that manufacturing in its region was improving. The Philly Fed's manufacturing index rose to 17.6 in February from 15.2 in January. That followed reports the previous two days that also pointed to a pickup in business at U.S. factories.

Other data showed that the number of newly laid off workers seeking unemployment benefits in the United States rose last week to 473,000 from 440,000 a week earlier.

Also, the Conference Board's forecast of future U.S. economic activity rose for a 10th straight month in January, but noted the pace of growth was slowing. Its index of leading economic indicators rose 0.3 per cent last month, weaker than the 1.2 per cent rise in December and the 1.1 per cent increase in November.

Hewlett-Packard Co.'s profit swelled 25 per cent to US$2.3 billion in the latest quarter because of cost-cutting and a stronger showing from its personal computer division. Revenue was up in most of the technology company's major divisions and HP raised its 2010 outlook, citing "accelerating market momentum." Its shares rose 69 cents to US$50.81.

The latest earnings report from Wal-Mart Stores Inc. failed to excite buyers even as the retailer reported a 22 per cent increase in its fourth-quarter profit. However, sales at stores open at least a year -- an important measure of a retailer's health -- fell 1.6 per cent. The company also offered a tepid earnings outlook and its shares fell 59 cents to US$53.47.