TORONTO - The Toronto stock market stayed in positive territory in late morning trading Friday amid a report that inflationary pressures eased considerably last month.
The S&P/TSX composite index added 51.12 points to 12,211.99 after straying into negative territory earlier in the day.
Statistics Canada said the country's national inflation rate slipped by two-tenths of a point to 1.4 per cent, and the closely watched Bank of Canada core rate fell even further - by four-tenths of a point to 1.7 per cent in March.
The report raised speculation that the central bank may backtrack on hints it made earlier this week that it could raise its key lending rate as early as June 1. This, combined with another Statistics Canada report that retail sales increased for a third straight month in February, is making it difficult for investors to find direction, said Gavin Graham, global strategist at Excel Funds Management.
"The economy is showing signs of strength and it makes it all the more likely, especially as the bank has changed its wording, that you are going to see interest rates increasing," Graham said.
"So you then get that struggle between, 'Yes, (inflation) is a good number, but the implication of that is they're going to take away the extraordinary ease that they had in place during the depths of the recession."
The inflation report sent the dollar below parity with the greenback, falling 0.29 cent to 99.71 cents US.
All the Toronto sectors were in positive territory at late morning amid stronger commodity prices.
The June crude contract on the New York Mercantile Exchange gained 81 cents to US$84.51 amid relief that Greece has formally asked for a bailout from the eurozone and the International Monetary Fund. The Toronto energy sector gained 0.55 per cent, while shares in Suncor Energy Inc. (TSX:SU) added 45 cents at C$34.31.
The June bullion contract added $13.10 to US$1,156 an ounce. The gold sector jumped 1.5 per cent while Barrick Gold Corp. (TSX:ABX) shares gained 48 cents to C$40.66.
The base metals sector added 0.47 per cent as the May copper contract on the Nymex gained 3.3 cents to US$3.52 per pound. Shares in Teck Resources Ltd.(TSX:TCK.B) added 14 cents to C$44.13 after the company announced Thursday that it will reinstate its dividend.
The financial sector gained 0.16 per cent. Shares in Toronto-Dominion Bank (TSX:TD) slipped 21 cents to $76.75.
The TSX Venture Exchange gained 7.86 points to 1,659.90.
In New York, the major indexes were mixed as the U.S. Commerce Department said sales of new homes in the United States surged 27 per cent last month, bouncing off February's record low and blowing past expectations as better weather and government incentives boosted sales.
This was offset by a report that new U.S. orders for big-ticket manufactured goods dropped sharply last month due to a plunge in demand for commercial aircraft. However, excluding the volatile transportation category, orders rose by 2.8 per cent, the most since the recession began.
The Dow Jones industrial average added 1.74 points to 11,136.03. The S&P 500 slipped 0.69 point to 1,207.98, while the Nasdaq lost 6.35 points to 2,512.72.
In Canadian corporate news, shares in Cipher Pharmaceuticals Inc. (TSX:DND) gained 15 cents or 12 per cent to $1.40 after the Toronto-area company said it narrowed its first-quarter loss and increased revenue due to higher prescription sales of Lipofen, which is used to treat a cholesterol disorder.
And the U.S. parent of Sears Canada Inc. (TSX:SCC) said Friday it's moving to increase its stake in the Canadian department store chain above 90 per cent, a threshold that would allow for a forced privatization of the national retailer. Shares in Sears Canada lost 50 cents to $29.02.
European markets rallied sharply after Greek officials said they would make a formal request to tap a rescue package. The debt-burdened country will have access to about US$53.37 billion.
Overseas, Britain's FTSE 100 rose 1.1 per cent, Germany's DAX index gained 1.6 per cent, and France's CAC-40 added 0.8 per cent.
