TORONTO - The Toronto stock market closed slightly higher Tuesday as investors balanced worries about an economic downturn with reassuring words on the American economy from the head of the U.S. Federal Reserve.

The S&P/TSX composite index climbed 12.44 points to 11,517.18 while the TSX Venture Exchange was 1.66 points lower at 1,451.66.

Fed chairman Ben Bernanke said Monday night that he was hopeful that the world's No. 1 economy will gain traction and not fall into a "double-dip" recession.

Bernanke said expects a continuing recovery but that it "won't feel terrific," and also added that he believes European leaders are taking the right steps to control rising deficits.

But investors also continued to focus on fears that the European debt crisis will grow, that a slowing Chinese economy means less demand for the commodities that support the resource-heavy TSX and on poor jobs data from the U.S. last week.

"We're really in an environment here now that really, the dominant factors, are these broader global considerations," said Garey Aitken, director of equity research at Bissett Investment Management in Calgary.

"We seem caught in a several-week window here where news just tends to be negative."

The base metals sector provided a large chunk of late session support, up 1.36 per cent as the July copper contract was up one cent at US$2.78 a pound. Copper has plunged about 24 per cent since mid-April as investors worry about a return to recession. Teck Resources (TSX:TCK.B) was up $1.59 to C$32.73 while First Quantum Minerals (TSX:FM) lost $1.38 to $50.03.

The energy sector moved 0.24 per cent higher as the July crude contract on the New York Mercantile Exchange moved 55 cents higher to US$71.99 after losing ground over the past two sessions on worries about slowing demand. Canadian Natural Resources (TSX:CNQ) rose 44 cents to C$36.22.

Investors looking for a safe haven continued to push gold prices higher with the August contract in New York up $4.80 to a record close of US$1,245.60 an ounce. However, gold stocks were mixed with Barrick Gold Corp. (TSX:ABX) 32 cents lower at C$45.49 while Centerra Gold Inc. (TSX:CG) improved by 50 cents to C$12.71.

The Canadian dollar rose 1.05 cents to 95.37 cents US as Canada Mortgage and Housing Corp. reported that the annual rate of housing starts dropped last month. The agency pegs the rate at 189,100 units in May, down from a revised 201,800 in April.

CMHC's chief economist, Bob Dugan, said the figures are consistent with the agency's forecast that housing starts will reach 182,000 units this year.

The euro was trading at US$1.1955 as investors were reminded that the European debt crisis goes well beyond the borders of Greece, Spain and Portugal. Fitch Ratings agency warned that Britain faces a "formidable" fiscal challenge and must cut its budget deficit faster to maintain its top credit rating.

The debt crisis has sent the euro currency to four-year lows and raised worries about the future of the currency itself.

New York markets were mainly higher following the Bernanke comments as the Dow Jones industrials jumped 123.49 points to 9,939.98.

The Nasdaq composite index declined 3.33 points to 2,170.57 while the S&P 500 index was up 11.53 points at 1,062.

In corporate news, shares in Maple Leaf Foods (TSX:MFI) were 25 cents lower at $9.26 after the Globe and Mail reported that the Ontario Teachers' Pension Plan is planning to sell its 35.3 per cent stake in the food company. The stake is worth about $450 million, represents one of Teachers' largest public-company investments and was its largest single holding of a listed company in Canada as of Dec. 31.

Goldcorp Inc. (TSX:G) shares were down 47 cents at $46.40 after the miner was ordered to close its Marlin mine in Guatemala by the Inter-American Commission on Human Rights. It has called for the project to be shut pending an investigation into alleged human rights abuses and environmental problems. Goldcorp hasn't had a formal indication from the government on how it will respond to the ruling, which was issued on May 20 and reportedly requires Guatemala to comply within 20 days.

Russian state-owned uranium mining company JSC Atomredmetzoloto will take controlling stock interest in Vancouver-based Uranium One Inc. (TSX:UUU) in exchange for interests in two southern Kazakhstan uranium mines. Uranium One is to issue 356 million new common shares, worth about C$932.7 million at its most recent price, to the Russian firm for stakes in the Akbastau and Zarechnoye joint ventures and US$610 million in cash. Uranium One shares were down nine cents to $2.53.

TransAlta Corp. (TSX:TA) shares moved down 17 cents to $20.53 after it said Monday it has declared force majeure after a problem at its 353-megawatt Sundance 3 thermal power plant in Wabamun, Alta.. The company said there was a mechanical failure of generator components at the power plant, which is expected to be back in service by June 20, running at a reduced capability of about 330 MW. The company said it does not expect the breakdown to have a material impact on its full-year net income.

Bombardier Inc. (TSX:BBD.B) shares gained three cents to C$4.50 after the company received a certificate of air worthiness from Transport Canada for the first of four Global 5000 jets to be operated by the German defence ministry.

TG World Energy Corp. (TSXV:TGE) shares jumped eight cents or 72.7 per cent to 19 cents in heavy trading on the TSX Venture Exchange after the company said it was notified by the project operator at its Tindalo-1 well in the Philippines that production testing is complete. Tindalo-1 has a maximum flow rate of 18,689 barrels of oil per day.