TORONTO - North American stock markets finished higher Friday with Toronto's main index managing to stretch its spring rally to seven weeks as investors responded with relative optimism to the U.S. Federal Reserve's methodology for its "stress tests" of 19 U.S. banks.

However, their position wasn't ironclad as markets examined the calculations and traders backed off on U.S. bank stocks.

Toronto's S&P/TSX composite index ended the day ahead 139.98 points to 9,549.48, and the Canadian dollar moved ahead 0.96 of a cent at 82.67 cents US.

On the TSX, gold stocks were ahead 4.4 per cent as the June bullion contract gained $7.50 to US$914.10 on the New York Mercantile Exchange.

Energy stocks gained one per cent as the June light, sweet crude contract rose $1.93 to close at US$51.55 per barrel on the Nymex.

The TSX Venture Exchange also moved up 18.87 to 1,006.81, and this was the first time it closed above 1,000 points since mid-October.

On Wall Street, the Dow Jones industrial average, which closed up 119.23 points at 8,076.29, ended about 0.7 per cent lower on the week.

The Nasdaq composite index was ahead 42.08 points to 1,694.29, while the S&P 500 index gained 14.31 to finish Friday at 866.23.

The U.S. Federal Reserve said Friday the U.S. government was prepared to rescue any of the banks that underwent "stress tests" and were deemed vulnerable if the recession worsened sharply.

The Fed said the 19 companies that hold one-half of the loans in the U.S. banking system won't be allowed to fail -- even if they fared poorly on the stress tests.

"There are no major shocks in here. That's why the market's holding up well," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group. "It's been hanging over the market for the last few days."

In other data, U.S. home sales slipped last month, but still managed to beat expectations, giving investors hope that builders are starting to see signs of a housing market recovery. New-home sales fell 0.6 per cent in March to a seasonally adjusted annual rate of 356,000 from an upwardly revised February rate of 358,000, the U.S. government said.

Meanwhile, Ford announced results that beat analysts' expectations. The automaker, the only one of the Detroit Three that hasn't asked for immediate government aid, booked a net loss of $1.4 billion or 60 cents a share during its first quarter, with adjusted earnings of 75 cents per share.

Centerra Gold Inc. (TSX:CG) shares were ahead more than 16 per cent to $7.26 after the company announced a new agreement with the government of Kyrgyzstan over its Kumtor mine in the Central Asian republic, giving the government one-third of the company.

SNC-Lavalin Group Inc. (TSX:SNC) has acquired a 50-employee consulting engineering firm based in Santiago, Chile, for an undisclosed price. Shares rose 89 cents to $36.

3M Co.'s quarterly profit dropped 48 per cent as the global economic slowdown hurt its sales, and prompted it to scale back its 2009 outlook again.