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TORONTO (Reuters) - Toronto's main stock index ended slightly higher in choppy trade on Thursday after a successful Spanish bond auction sparked an early positive tone in markets, but mixed U.S. economic data and corporate earnings kept a firm lid on gains.
SXC Health Solutions SXC.TO rose for a seventh straight session, surging 8.9 percent to C$96.49 in the afterglow of its deal to buy rival U.S. pharmacy benefit manager Catalyst Health Solutions Inc CHSI.O for about $4.4 billion.
Among the key laggards, Bank of Nova Scotia (BNS.TO) fell 0.7 percent to C$55.05, Canadian National Railway (CNR.TO) lost 0.5 percent to C$79.56 and Shoppers Drug Mart SC.TO slipped 1.7 percent to C$43.55.
"(Investors) may be taking money out of some of the more stable stocks, like a Shoppers or something like that that's hung in there better than some of these resource stocks which have been battered, so it might be part of a bit of a rotational trade," said Paul Hand, managing director at RBC Capital Markets.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 24.80 points, or 0.2 percent, at 12,153.69. All three of the heavyweight financials, materials and energy groups were stronger, but the rest of the sectors ended in negative territory.
Weak U.S. data put a damper on broader confidence, weighing on Wall Street as indexes south of the border ended lower. .N
The number of Americans claiming unemployment benefits for the first time fell only slightly last week, suggesting that job growth in April will not improve much after March's disappointing performance.
Other data on Thursday showed factory activity in the Mid-Atlantic region slowed sharply this month and home resales dropped for a second straight month in March.
The Spanish auction wasn't all positive either. Spain sold 2.5 billion euros in two- and 10-year bonds, at the top end of the targeted amount. But yields on the key 10-year bond were higher, reflecting fears that Spain may miss budget deficit targets, as well as concerns about its banks.
Investors worried about the higher yields demanded in the auction and about a possible future credit rating downgrade for France, where upcoming presidential elections pose an additional risk.
Market players are also paying close attention to any new signals on the direction of global growth.
Canada's economy will likely lag the United States this year, slowing compared with 2011 and probably falling short of cheerier economic forecasts touted by the Bank of Canada this week, a Reuters poll found on Thursday. <ECILT/CA>
While Canada will fare better than many of its Western peers, especially in Europe where many countries are in or close to recession, there was a sense of caution in the forecasts of around 30 economists polled over the past week.
"We're getting a little bit better sentiment regarding global growth of late and what we've found is that the Canadian markets are obviously becoming increasingly sensitive to not only the economic trends domestically and even in the U.S. but around the globe," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.
"As we get a little bit better sentiment and better data from China, emerging markets, even to some degree some relief in the European markets, that has really reflected positively."
Reporting by Claire Sibonney; Editing by Chizu Nomiyama