TORONTO(Reuters) - Strong earnings from some of Canada's biggest companies and a spate of merger activity are banishing any thoughts of stock investors adhering to the old saw: "sell in May and go away".There's too much going on. The Toronto Stock Exchange's S&P/TSX composite index raced to a record high of 13,808.81 on Friday. In the first week of May the TSX index closed up one percent.

With records tumbling, investors could not be faulted for deciding — sooner or later — to lock in profits. After all, a Reuters poll of 11 market watchers in March said the Toronto Stock Exchange would likely end 2007 at 12,900, 869.89 points below its close of 13,769.89 on Friday.

"Better than expected earnings growth in the US and Canada, and M&A activity is still alive. These are the two things that are driving the market," said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

"I definitely think we are still strong. There is nothing on the horizon that I can see derailing this uptrend in the market."

The frenetic pace of the past few weeks has been spurred in part by international take-over activity, including some big foreign take-overs of Canadian companies.

BCE Inc., the country's biggest telephone company, said in April it was in nonexclusive talks with the Canada Pension Plan Investment Board, US take-over specialist Kohlberg Kravis Roberts & Co., and two other Canadian pension funds to explore the possibility of taking BCE private.