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The screens at the TMX Broadcast Centre in Toronto show the closing numbers of the TSX on Tuesday, July 3, 2012.Matthew Sherwood/The Globe and Mail

The Toronto stock market closed modestly higher at the end of a volatile week amid a partial U.S. government shutdown that was in its fourth day Friday and an approaching deadline when the U.S. government hits its debt limit.

The S&P/TSX composite index was ahead 23.53 points to 12,758.65 , led by beaten-down mining stocks, while the Canadian dollar was up 0.32 of a cent to 97.16 cents US.

U.S. indexes turned higher as the Dow Jones industrials climbed 76.1 points to 15,072.58, the Nasdaq gained 33.41 points to 3,807.75 and the S&P 500 edged up 11.84 points to 1,690.5.

But for the week, North American markets ended lower amid fears that an Oct. 17 deadline for raising the U.S. government's debt ceiling could be more disruptive than the partial shutdown.

"I guess I take a simplistic view that it's not in anyone's interest, Republicans or Democrats, to be blamed for a default," said Ian Nakamoto, director of research at 3MACS.

"There has to be some sort of resolution and like most resolutions, it will come at the very end. We could be in this see-saw patter to the middle of October and there could be a couple of scary down days."

The TSX shed 0.66 per cent and the Dow industrials fell 1.22 per cent over the past week.

Markets initially took the partial shutdown of non-essential government services well, with traders hoping it would be short-lived.

But investor anxiety has risen as Republicans in the House of Representatives continue to insist on changes to so-called Obamacare while President Barack Obama refuses to consider any deal linking his signature health-care legislation to routine legislation needed to fund the government.

The U.S. Treasury Department warned Thursday that a default could cause U.S. credit markets to freeze, the value of the dollar to plummet and U.S. interest rates to skyrocket.

Mining stocks provided most lift on the TSX after losing substantial ground during this week. The base metals sector rose 1.17 per cent while December copper was up three cents to US$3.30 a pound. Teck Resources (TSX:TCK.B) was ahead 54 cents to C$27.86.

The energy sector was up 0.74 per cent with the November crude contract on the New York Mercantile Exchange rising 53 cents to US$103.84 a barrel as offshore oil rigs in the Gulf of Mexico braced for tropical storm Karen. Some 20 per cent of U.S. oil production is sourced from the Gulf of Mexico. Suncor Energy (TSX:SU) climbed 44 cents to C$36.69.

Gold stocks led decliners, down about 0.7 per cent with December bullion down $7.70 to US$1,309.90 an ounce. Kinross Gold (TSX:K) faded seven cents to C$4.94.

The tech sector was also weak with BlackBerry (TSX:BB) off nine cents at $7.88.

The smartphone maker expects to receive a US$500-million tax rebate within the next year. It wasn't clear from a regulatory filing whether the bulk of the tax refund would come from Canada, where the global smartphone company is based, or another jurisdiction.

A major TSX gainer was Air Canada. Its shares (TSX:AC.B) shot up 52 cents, or 13.1 per cent, to $4.49 on very heavy volume of 10.3 million shares, rising to their highest price since the fall of 2008. The move came as analysts raised their price targets after the airline announced improved cost estimates.

In other corporate news, Twitter Inc. has released its initial public offering documents ahead of a stock debut expected before American Thanksgiving in late November. It hopes to raise up to $1 billion in one of the year's most eagerly awaited stock market debuts.

They show Twitter's annual revenue has soared from $28 million in 2010 to $317 million last year. Twitter gets 87 per cent of its revenue from advertising.

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