TORONTO - The Toronto stock market finished in positive territory Thursday, with commodity stocks moving ahead even as a higher U.S. dollar helped push oil and metal prices lower.

The S&P/TSX composite index gained 85.35 points to 11,464.57, hobbled by declines in gold and telecom stocks.

The Canadian dollar closed up 0.37 of a cent to 95.2 cents US after Statistics Canada said a strong rise in exports resulted in Canada posting a trade surplus with the world totalling $428 million in October. The better-than-expected showing came after the country had a trade deficit of $850 million in September.

Markets also found support after the U.S. trade deficit unexpectedly narrowed to US$32.9 billion in October as exports surged to the highest level in nearly a year.

Markets have been largely sluggish this week amid concerns about foreign debt, particularly after Standard & Poor's lowered its credit rating outlook on Spain to negative on Wednesday.

"People are cautious on the run because it's been a long way in a short period of time," said John Stephenson, portfolio manager at First Asset Funds, referring to a rally that has gone on practically non-stop since early March, taking the TSX up about 27 per cent year to date.

"And I think the market is just saying, look, take a breather and I think it's focusing again on the risk side, which is only heightened by these countries getting downgraded. And frankly they are smaller economies, they're not resource rich, (and) their banking sector is even more screwed up than the Americans."

The energy sector was the strongest gainer, up 1.79 per cent as the January crude contract on the Nymex gave back 13 cents to US$70.54 a barrel. On the TSX, Suncor Inc. (TSX:SU) rose $1.16 to C$36.80.

The base metals sector was up 1.58 per cent as the March copper contract on the New York Mercantile Exchange was down two cents at $3.10. Teck Resources (TSX:TCK.B) gained 80 cents to C$37.25.

Frontera Copper Corp. (TSX:FCC) fell $7.50 or 8.9 per cent to $76.75 after it warned Wednesday that it was unable to confirm that it will be able to make an interest payment due Dec. 15 on its series 1 June 2010 notes.

Freewest Resources Canada Inc. (TSXV:FWR) shares gained eight cents to 96 cents on heavy volume of 51.1 million shares as it said its white-knight suitor, Cliffs Natural Resources (NYSE:CLF), had increased its takeover offer again, to $1 per share in stock. The new offer values Montreal-based Freewest at $240 million. Freewest's chief assets are its chromite deposits in the James Bay region of northern Ontario.

Results from sports clothing maker Gildan Activewear Inc. (TSX:GIL) helped send the consumer discretionary sector up 1.1 per cent. The company posted a profit of $42.4 million or 35 cents a share in the fourth-quarter, up from $21.8 million or 18 cents a share a year ago. But revenue declined from a year ago, down to $301.7 million from $324.7 million, which missed analyst expectations. Its shares advanced $2.30 to $23.34.

The TSX financial sector, depressed in recent days by foreign debt worries, lent support, rising 0.61 per cent. National Bank (TSX:NA) advanced $1.56 to $59.02 and Manulife Financial (TSX:MFC) rose 47 cents to $17.96.

The gold sector was down 0.52 per cent even as the February bullion contract on the Nymex moved up $5.30 to US$1,126.20 an ounce. Barrick Gold Corp. (TSX:ABX) faded 43 cents to $43.09.

The TSX Venture Exchange moved 7.52 points higher to 1,417.6.

New York markets ran ahead as the trade data balanced another report showing claims for unemployment benefits rose after falling for five straight weeks.

"These smaller trade balances are great news," said James Cox, managing partner at Harris Financial Group in New York. "Any time you have a small trade balance, that will really contribute greatly to GDP."

The Dow Jones industrial average climbed 68.78 points to 10,405.83 as the Labour Department said the number of newly laid-off workers seeking jobless benefits rose to 474,000, up from 457,000 last week. Economists had been expecting 460,000 new claims.

The report is the latest evidence that the recovery will be bumpy, which means the U.S. Federal Reserve will likely keep interest rates low for some time.

The Nasdaq composite index moved up 7.13 points to 2,190.86 while the S&P 500 index rose 6.4 to 1,102.35.

In other earnings news, Lululemon Athletica Inc. (TSX:LLL) reported Wednesday a profit of $14.1 million or 20 cents a diluted share in the quarter ended Nov. 1 -- up from year-earlier net income of $8.8 million, or 13 cents per diluted share. Revenue increased 29.7 per cent to $112.9 million from $87 million in the same 2008 quarter, while comparable-store sales increased by 10 per cent. Its shares dropped $1.18 to $28.06 after gaining nearly three per cent Wednesday before the earnings were released.

Garda World Security Corp. (TSX:GW) had a $1.4-million profit in its latest quarter, recovering from the $2.2-million loss it reported at the same time last year. Revenue from continuing operations was down, falling to $263.4 million from $281.5 million. Garda's shares were down 51 cents to $10.04.

Empire Company Ltd. (TSX:EMP.A), which has more than 1,300 grocery stores across Canada under several banners, including Sobeys, IGA, Foodland, Price Chopper and Thrifty Foods, says its net income rose to $70.4 million or $1.03 per share in its second quarter. That's up from $65.6 million or $1 per share in the year-earlier period. Its shares rose 25 cents to $44.50.