TORONTO -- The Toronto stock market was higher mid-afternoon Thursday amid a mixed reception to a string of positive earnings reports from Canada's big banks and generally lower commodities.

The S&P/TSX composite index was 56.78 points higher at 12,789.17, held back by lower gold stocks, while the TSX Venture Exchange lost 2.03 points to 1,129.09.

The Canadian dollar was down 0.56 of a cent to 97.19 cents US.

U.S. indexes also advanced as the latest look at fourth-quarter economic growth was disappointing while an important reading of the manufacturing sector in the American Midwest made a strong showing.

The U.S. economy grew at a 0.1 per cent annual rate from October through December, the weakest performance in nearly two years. The Commerce Department's revision to fourth-quarter growth was only slightly better than its initial estimate that the economy shrank at a rate of 0.1 per cent. And it was well below the 3.1 per cent growth rate reported for the July-September quarter.

Other data showed that the Chicago purchasing managers index moved further into expansion territory, up 1.2 points to an 11-month high of 56.8.

The Dow Jones industrials could be on track to another record high close, up 66.43 points to 14,141.8. The Nasdaq composite index was ahead 18.21 points to 3,180.47 while the S&P 500 index climbed 8.54 points to 1,524.53.

In the background, financial markets remain worried about the recent Italian election, which failed to yield a clear winner, and the looming U.S. across the board spending cuts totalling US$85 billion that are set to begin Friday.

Referred to as sequestration, the cuts could hit U.S. growth if no deal is reached to avoid it. Previous experience, however, suggests a last-minute deal will be cobbled together.

"You can only shock people so many times, things will probably get solved, it's in everybody's best interests to solve these things," said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

"It's more uncertain what will happen in Italy."

TD Bank (TSX:TD) reported $1.79 billion of net income before adjustments, about $300 million higher than the same time last year, and said its quarterly dividend will rise by four cents to 81 cents per share starting in April. Ex-items, earnings rose to $2, beating analysts expectations of $1.92 a share, but its shares gave up early gains to move down four cents to $84.25 amid lower results in its wholesale banking revenue.

Royal Bank of Canada (TSX:RY) has announced a dividend increase along with its latest financial report, which included a record profit at RBC's core segment and adjusted earnings that beat analyst estimates.

RBC's first-quarter net income was up by $215 million to $2.07 billion, or $1.36 per share, and its quarterly dividend will rise five per cent to 63 cents per share. Excluding special items, the bank earned $1.38 a share, seven cents higher than analysts' expectations. Its shares advanced 67 cents to $64.15.

CIBC (TSX:CM) says its net income slipped to $798 million or $1.91 a share in the first quarter of its current financial year, down from $835 million a year earlier. Results were impacted by a $148-million loss from the settlement of a contract dispute linked to the collapse of Lehman Bros. in 2008. Ex-items CIBC earned $2.15 per share, seven cents better than estimates. But unlike the other two banks, CIBC didn't increase its dividend and its shares slipped 86 cents to $83.02.

"They're very resilient, they have an excellent business mix," Nakamoto said of the banks. "I think the growth rate will slow. There's no doubt about that as the Canadian economy is slowing. But the Achilles heel for them in the past has been loan losses and they still seem quite contained."

The tech sector led advancers, with BlackBerry (TSX:BB) ahead 39 cents to $13.97.

Strength also came from the industrials sector as Canadian National Railways (TSX:CNR) ran ahead $2.52 to $104.20 after earlier hitting a fresh, 52-week high of $104.34.

The energy sector was ahead 0.67 per cent with the April crude contract on the New York Mercantile Exchange down 36 cents to US$92.40. Cenovus Energy (TSX:CVE) rose 50 cents to C$33.28.

April bullion moved down $17.60 to US$1,578.10 an ounce and the gold sector lost 1.33 per cent. Iamgold (TSX:IMG) declined 22 cents to C$7.05.

The base metals sector was down 0.14 per cent while May copper was down two cents at US$3.55 a pound.

In other earnings news, bakery and grocery company George Weston (TSX:WN) says net earnings fell 40 per cent in the fourth quarter to $65 million or 43 cents per share. That helped to pull full-year profits down more than 23 per cent amid restructuring and other charges aimed at shoring up its competitive position.

Earnings ex-items were $1.02 per share compared with $1.01 in the same period in 2011 and its shares rose 31 cents to $73.94.

Valeant Pharmaceuticals International (TSX:VRX) posted a quarterly net loss $89.1 million or 29 cents per diluted share in the latest period. Adjusting for one-time items, it earned $1.22 per share, two cents below analyst forecasts. Its shares gained 78 cents to $69.03.

In New York, Groupon, the coupons website, plunged 21 per cent to US$4.71 after reporting late Wednesday that its quarterly loss had expanded.

Retailer J.C. Penney fell 15.25 per cent to $17.93. Investors were unnerved by the quarterly loss the department store reported late Wednesday, which was larger than they were expecting.