TORONTO — The Toronto stock market was modestly higher Friday as investors built on a solid advance and looked ahead to the latest data on the resurgent U.S. housing sector.The S&P/TSX composite index gained 43.96 points to 12,718.31 after running up 101 points Thursday in the wake of strong manufacturing data from China and Europe.The Canadian dollar continued to slide, down another 0.34 of a cent to 94.75 cents US, as Statistics Canada said the July consumer price index came in at an annualized rate of 1.3%, up from 1.2% in June.Economists had looked for Canada’s inflation rate to rise by two-tenths of a point to 1.4%.The loonie has tumbled about two U.S. cents this past week as the U.S. currency rose against other currencies amid growing conviction that the U.S. Federal Reserve will move this year to cut back on its monetary stimulus.The Fed has been buying US$85-billion of bonds every month to keep rates low and encourage investment. There is still a great deal of doubt about when the Fed might embark on tapering its asset purchases and the pace of such a cutback.U.S. indexes were slightly higher ahead of data on new home sales coming out mid-morning. The Dow Jones industrials were 16.71 points higher to 14,980.45The Nasdaq climbed 15.32 points to 3,654.02, supported by a seven per cent rise in Microsoft shares after the software giant announced that CEO Steve Ballmer is retiring in the next 12 months. The S&P 500 index was up 2.96 points at 1,659.92.Economists expect July home sales to slip 1.4% from June to an annualized rate of 490,000. But June new home sales surged by over eight per cent.The TSX tech sector led advancers with Celestica (TSX:CLS) ahead 11 cents to $11.39.The base metals component rose 0.4 per cent while September copper was unchanged at US$3.33 a pound. Lundin Mining (TSX:LUN) gained seven cents to $4.69.The energy sector also rose 0.4% with the October crude contract on the New York Mercantile Exchange off 55 cents to US$104.48 a barrel. Cenovus Energy (TSX:CVE) rose 29 cents to $30.24.The gold sector edged up 0.2% while December bullion inched up 50 cents to US$1,371.30 an ounce. Iamgold (TSX:IMG) improved by nine cents to $6.76.Financials were also positive ahead of earnings reports next week from most of the big Canadian banks. TD Bank (TSX:TD) was ahead 42 cents to $88.39.North American markets racked up solid gains Thursday after data from HSBC Corp. showed an expansion in China’s manufacturing in August. Traders took that as evidence that the world’s second-largest economy may be over its recent weakness. HSBC’s preliminary purchasing managers index rose to 50.1 from July’s 47.7, crossing the critical 50 threshold to indicate an expansion in activity.Traders were also encouraged by other manufacturing and service sector data which provided further evidence that the eurozone’s recovery from recession is gathering momentum.Speculation about what the Fed may do about its asset purchases has driven bond yields higher with the benchmark 10-year U.S. Treasury down from early levels and unchanged from late Thursday afternoon at 2.9%.Bond yields are up about 120 basis points since Fed chairman Ben Bernanke first mentioned the possibility of the Fed tapering its bond purchases in May.Those rising bond yields have particularly impacted interest sensitive stocks including utilities and telecoms. The utilities sector is down almost three per cent this week alone and more than eight per cent this month. Telecoms have also retreated, down about 1.75% this week although the sector has also been pressured recently by the prospect of American telco giant Verizon entering the Canadian wireless market.U.S. markets have also softened this month following a strong runup that saw the Dow up as much as 20 per cent year to date at the beginning of August.In other corporate news, Maple Leaf Foods Inc. (TSX:MFI) is selling its Rothsay business unit to Darling International Inc. of Irving, Texas. The Rothsay business operates six rendering plants and a biodiesel plant employing a total of 550 in four provinces. Maple Leaf says it will receive about $645-million for Rothsay and use the money to pay down corporate debt.European bourses were higher and London’s FTSE 100 index gained 0.58%, Frankfurt’s DAX rose 0.18 per cent while the Paris CAC 40 added 0.1%.Asian stocks rebounded Friday on the encouraging economic data from China and Europe.Japan’s Nikkei 225 index jumped 2.2%, Australia’s S&P/ASX 200 advanced 0.9%, South Korea’s Kospi added 1.1% and Hong Kong’s Hang Seng reversed early gains to close 0.2%.