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CANADA STOCKS-TSX roused from 3-day fall by US data, IMF remarks

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* TSX closes 21.53 points, or 0.18 pct, higher at 12,233.95

* All 10 index sectors stronger, led by commodities

By Claire Sibonney

TORONTO, Oct 11 (Reuters) - Canada's main stock index roseslightly on Thursday, recovering from three days of losses thatculminated in a five-week low, encouraged by U.S. employmentdata and comments from the IMF that were seen as supportingstability in the euro zone.

All 10 of the index's sectors were higher, led byresource-related shares as commodity prices rose.

Among the top advancers, Potash Corp

was up 2.2percent at C$41.43, Encana Corpclimbed 2.7 percent toC$21.79, and Teck Resourcesadded 1.6 percent toC$30.39.

Market sentiment was boosted by data that showed U.S.initial jobless claims fell to the lowest level in more than4-1/2 years.

That report followed a U.S. government report last week thatshowed a surprising drop in September's unemployment rate to 7.8percent.

"I think that the tone was set very early in the day withthe U.S. initial jobless claims coming in significantly betterthan expected," said Craig Fehr, Canadian market strategist atEdward Jones in St. Louis.

"So a bit of a carry-on from the most recent employmentreport we got in the States, which is to suggest thatconditions, while certainly not the level where most investorswould want to see them, are continuing to show modestimprovement and that's reflective of continued slow growth inthe economy."

The Toronto Stock Exchange's S&P/TSX composite index

ended up 21.53 points, or 0.18 percent, at 12,233.95,which was well off the day's high of 12,295.43 as the TSXtracked Wall Street lower on a drop in Apple

shares

after a legal ruling went against the company.

Early in the day, markets reacted positively to remarks fromChristine Lagarde, the IMF's managing director, who said thatindebted euro zone economies should have more time to cut budgetdeficits. Lagarde's comments helped to offset news of adowngrade of Spain's credit rating.

"I think the downgrade of Spain was already priced in," saidGavin Graham, president of Graham Investment Strategy.

"The fact is that there's no way Spain is investment gradeat present, so it's a question of what is the political will onthe part of the European authorities to continue buying Spain,and for that matter Italian, bonds."

Looking forward, investors will continue to follow U.S.company earnings for direction. The third-quarter earningsseason got off to a disappointing start on Tuesday and Wednesdaywith worrying reports from Chevron

and Alcoa.

"We're drifting along a little bit and there's no questionas we move now into third-quarter earnings season we're going tohave a split focus by the markets between what's going on inEurope, the broad economic focus, and certainly a more microeconomic focus on exactly what companies are delivering thisquarter," Fehr said.

($1=$0.98 Canadian)

(Reporting by Claire Sibonney; Editing by Peter Galloway)

((claire.sibonney@thomsonreuters.com)(+1-416-941-8142, ReutersMessaging: claire.sibonney.reuters.com@reuters.net))

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