Canada's main stock edged higher on Friday, led by consumer-related stocks, while U.S. approval of the Keystone XL pipeline gave TransCanada Corp a boost before some gains were pared.

The Toronto Stock Exchange's S&P/TSX composite index closed up 9.06 points, or 0.06 per cent, at 15,442.67.

It was the second straight day of gains for the index after Canada's government on Wednesday held off from raising taxes on investors in its budget.

Modest gains for the TSX on Friday came as stocks on Wall Street pared losses after Republicans pulled their bill to overhaul the U.S. health-care system.

Still, the index dipped 0.3 per cent for the week. It hit on Wednesday a three-month low intraday at 15,241.55.

"There is further near term downside to come," said Robert McWhirter, president and portfolio manager at Selective Asset Management Inc.

He expects a downturn in copper and oil to weigh on the commodity heavy TSX through June.

Together, the energy and materials groups account for more than 30 per cent of the index's weight.

TransCanada's Keystone XL pipeline would bring more than 800,000 barrels of heavy crude per day from Canada's oil sands to U.S. refineries and ports along the Gulf of Mexico.

The pipeline company's shares ended up 0.1 per cent at $61.82, while the overall energy group also gained 0.1 per cent as oil prices rose.

Prices of oil, one of Canada's major exports, were boosted by hopes that an Organization of the Petroleum Exporting Countries output cut was beginning to balance a long-oversupplied market.

U.S. crude prices settled 27 cents US higher at US$47.97 a barrel.

Six of the index's 10 main groups advanced, including a 0.7 per cent gain for consumer discretionary stocks and a 0.4 per cent gain for consumer staples, while the heavyweight financials group ended little changed.

Bombardier Inc said its CSeries will soon become the largest commercial aircraft capable of landing at London City Airport, a feat the Canadian planemaker expects will whet buyer interest at a time of sluggish market demand for new jets.

Its shares rose 0.5 per cent to $2.02.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.2 per cent.

Gold futures rose 0.1 per cent to US$1,248.3 an ounce, while copper prices declined 0.4 per cent to US$5,804.15 a tonne.

Canada's closely watched core measures of inflation remained tame in February, indicating little pressure for a Bank of Canada interest rate hike.  

U.S. MARKETS

A dramatic session on Wall Street ended with stocks slightly lower on Friday as they pared losses in late-afternoon trading after Republicans pulled their bill to overhaul the U.S. health-care system.

The benchmark S&P 500 shot up briefly into positive territory before falling back into the red as Republicans pulled the legislation due to a shortage of votes just before the markets closed, leaving investors to assess how the health-care bill's failure would affect President Donald Trump's broader economic agenda.

Investors had worried earlier this week that the failure of the bill, which would have dismantled the law known as Obamacare, would prove an ominous sign for Trump's ability to push through his economic agenda, including tax reform.

But some analysts and investors have seen a failure of the bill as a catalyst to bring forward action on tax reform in particular.

"Now that theyRve taken the health-care issue off the table, I think the market is more optimistic that they can do other things that are more doable that are not so complicated, such as regulatory reform and lowering taxes," said Margaret Patel, senior portfolio manager at Wells Fargo Asset Management in Boston.

The Dow Jones Industrial Average fell 59.86 points, or 0.29 per cent, to end at 20,596.72, the S&P 500 lost 1.98 points, or 0.08 per cent, to 2,343.98 and the Nasdaq Composite added 11.05 points, or 0.19 per cent, to 5,828.74.

The back-and-forth over the bill this week has led to some of the most volatile trading Wall Street has seen since Trump's election in November. For the week, the S&P 500 fell 1.4 per cent, its worst weekly decline of the year.

"This is now an indication that the president's agenda is probably going to be more ambitious than Congress can manage," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York. "It is probably going to mean that equity markets are going to have to factor in a degree of dysfunction that investors were hoping they wouldnRt have to."

The S&P 500 has climbed 9.6 per cent since Trump's election, notching a series of record highs along the way. But the rally has stalled recently, and Tuesday's 1.2 per cent drop set off concerns about the beginning of a larger fall.

"The economy and earnings were doing better since before the election," said Paul Zemsky, chief investment officer for multi-asset strategies and solutions at Voya Investment Management in New York. "If people want to drop the S&P by 300 points because this doesn't pass, I and others will be down there to buy it."

Shares of hospital operators finished sharply higher, with Tenet Healthcare up 7.4 per cent. The potential dismantling of Obamacare has pressured hospital stocks over concerns the benefits the companies gained from coverage expansion would diminish.

In corporate news, Micron Technology jumped 7.4 per cent after the chipmaker's revenue and profit forecasts beat expectations. The stock was the biggest percentage gainer on the S&P and helped lift the Nasdaq.

GameStop tumbled 13.6 per cent after the company's  profit projection fell below estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored advancers.

The S&P 500 posted 19 new 52-week highs and three new lows; the Nasdaq Composite recorded 58 new highs and 40 new lows.

About 6.2 billion shares changed hands in U.S. exchanges, below the 7.1 billion daily average over the last 20 sessions.