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TSX ends up 0.5% at 21,807.37

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For the week, the index falls 0.4%

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Communications sector gains 0.6%

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Financials add 0.7%

(Updates at market close)

By Fergal Smith

April 19 (Reuters) - Canada's main stock index edged

higher on Friday as energy and interest rate sensitive shares

notched gains, with the index outperforming Wall Street and

clawing back some of its weekly decline.

The Toronto Stock Exchange's S&P/TSX composite index

ended up 98.93 points, or 0.5%, at 21,807.37, its

third straight day of gains. For the week, it was down 0.4%

after declining 1.6% in the previous week.

The Nasdaq and the S&P 500, two major U.S. benchmark

indexes, fell after mixed corporate earnings and amid growing

pessimism that the Federal Reserve would cut interest rates

soon.

"It's positive to see a bit of a bounce in interest rate

sensitive stocks," said Lorne Steinberg, president, Lorne

Steinberg Wealth Management Inc. "We are probably going to get

an interest rate cut (in Canada) sooner than they will in the

U.S."

Money markets see a roughly 50% chance the Bank of Canada

will begin easing as soon as June, while they expect the Fed to

wait until July or September.

Communication services stocks tend to pay high

dividends so they could particularly benefit from a move to rate

cuts. The sector rose 0.6%, helped by a gain of 1% for the

shares of BCE Inc. ( BCEXF )

"We are quite bullish on BCE with a 9% dividend yield which

we believe is sustainable," Steinberg said.

Some other high dividend paying stocks, including banks and

pipeline companies, also gained ground. The heavily-weighted

financials index added 0.7% and Enbridge Inc ( ENB )

was up 2.8%.

Energy rose 0.6% as the price of oil

settled 0.5% higher at $83.14 a barrel after Iran played down a

reported Israeli attack on its soil in a sign that an escalation

of hostilities in the Middle East might be avoided.

Technology was the biggest drag on the market,

ending 0.7% lower.