TORONTO - The Toronto stock market was little changed mid-morning Thursday as investors grew increasingly frustrated by the failure of U.S. lawmakers to come to an agreement to raise the debt ceiling.

The S&P/TSX composite index rose 16.94 points to 13,049.61 while the TSX Venture Exchange dropped 4.58 points to 1,981.2.

The Canadian dollar was up 0.02 of a cent at 105.41 cents US.

The TSX has plunged more than 450 points this week amid fears that the U.S. government won't clinch a deal in time to prevent a potential debt default.

The U.S. Senate, House of Representatives and President Barack Obama have been unable to reach a deal that will raise the country's $14.3 trillion borrowing limit by the Aug. 2.

The House plans a vote Thursday on a Republican plan to cut spending and raise the borrowing limit. The Democratic-controlled Senate is watching what happens before moving ahead with its own vote.

"This has very little to do with economics and everything to do with politics," said Gareth Watson, vice-president investment management and research at Richardson GMP Ltd.

"The fact that we don't need to be going through this right now is frustrating in that there is a very simple solution to this problem, and that is shut up, get down to the House, increase the debt ceiling."

Also weighing on investor minds is the possibility of a debt downgrade, which would raise interest rates as the difficulty of reaching an agreement on raising the debt limit may leave a lasting impact on investor sentiment.

Industrial stocks led advancers, up 1.5 per cent as Canadian Pacific Railway (TSX:CP) shares climbed $3.32 to $61.32 following the release of a solid earnings report on Wednesday.

The financial sector was also positive with Royal Bank (TSX:RY) ahead 56 cents to $51.89 and Manulife Financial (TSX:MFC) gained 33 cents to $15.48.

Oil prices ticked higher following a drop of more than $2 Wednesday on worries about how economic disruptions would affect demand. Prices were also depressed by data showing a surprising increase in U.S. oil inventories last week.

On Thursday, the September crude contract was up 30 cents to US$97.70 a barrel and the TSX energy sector fell 0.38 per cent.

Exxon Mobil Corp. said Thursday that higher oil prices and improved refining margins boosted its second-quarter profits 41 per cent to US$10.68 billion, or $2.18 per share. Revenue grew 36 per cent to US$125.5 billion and its shares fell $1.13 to US$82.18 in New York.

Its Canadian subsidiary, Imperial Oil Ltd. (TSX:IMO) reported its net profit in the second quarter rose 40 per cent to $726 million or 85 cents a share on a sharp jump in revenues caused by higher oil prices and improved production at its Cold Lake oilsands business. Its shares dipped 38 cents to C$42.55.

Suncor Energy (TSX:SU) shares lost 62 cents to $37.52 even as higher oil and gas prices helped major the company improve its second-quarter earnings to $562 million from a year-earlier $540 million. The strong showing came even as production took an expected dip and it booked a $514-million writedown on its Libyan assets.

The base metals sector was off 0.24 per cent as the September copper contract gained three cents at US$4.48. Thompson Creek Metals (TSX:TCM) fell 17 cents to C$8.65 while Teck Resources (TSX:TCK.B) moved up 47 cents to $47.76.

The gold sector lost two per cent as bullion moved further away from Tuesday's latest record high, down $8.10 to US$1,607 an ounce. Goldcorp Inc. (TSX:G) dropped $2.70 to C$45.53.

Barrick Gold Corp.'s (TSX:ABX) second-quarter net earnings rose 35 per cent to US$1.16 billion or $1.16 a share, boosted by higher gold and copper prices, as well as stronger sales. The results beat analyst expectations by five cents a share. Revenues increased to $3.43 billion from $2.62 billion and its shares faded 99 cents to C$45.01.

Elsewhere in the resource sector, Potash Corp. of Saskatchewan (TSX:POT) says its second-quarter profits jumped to $840 million from $480 million a year ago helped by rising prices for potash driven by higher demand. Earnings per share climbed to a record for the quarter of 96 cents from 53 cents a year earlier. Sales rose to $2.33 billion from $1.44 billion and Potash shares gained $1.55 to $57.58.

New York markets were higher amid some good employment news. The number of people seeking unemployment benefits dropped last week by 24,000 to a seasonally adjusted 398,000, the lowest level since early April.

The Dow Jones industrial average gained 48.82 points to 12,351.37.

The Nasdaq composite index was up 23.59 points to 2,788.38 while the S&P 500 index was up 7.62 points to 1,312.51.

In other earnings news, Talisman Energy Inc. (TSX:TLM) shares slipped 99 cents to $17.76 as the company reported its net income rose to $698 million or 68 cents a share in the second quarter ended June 30, compared with net earnings of $572 million in the same quarter last year. Total revenue and other income for the quarter was just over $2.2 billion compared to $1.6 billion in income in the second quarter of 2010. Analysts expected Talisman to earn 30 cents per share with $2.1 billion of revenue.

Thomson Reuters (TSX:TRI) said its second-quarter net income was $572 million, with $563 million of earnings attributable to common shareholders. Earnings per share was 67 cents, up from 35 cents a year earlier. Revenue at the global information services company, which reports in U.S. dollars, was US$3.4 billion, up seven per cent from a year before. Its shares gained $1.12 to $33.05.

Earlier in Asia, Japan's Nikkei 225 stock average sank 1.5 per cent, South Korea's Kospi fell 0.8 per cent, Hong Kong's Hang Seng Index edged up 0.1 per cent while mainland China's Shanghai Composite Index declined 0.5 per cent.

London's FTSE 100 index added 0.12 per cent, Frankfurt's DAX declined 1.23 per cent while the Paris CAC 40 was down 0.68 per cent.