The Toronto stock market was higher Friday morning amid a solid Canadian employment report for June and higher commodity prices.
The S&P/TSX composite index gained 39.5 points to 11,472.9 and the TSX climbed 8.88 points to 1,361.89.
Statistics Canada reported that the economy created 93,200 jobs last month, much higher than the 20,000 that economists had expected. The unemployment rate dropped to 7.9 per cent from 8.1 per cent in May.
“There’s no arguing with this strong report,” said BMO Capital Markets economist Benjamin Reitzes.
“The jobs picture clearly shows that the Canadian recovery hasn’t stalled yet, despite signs of slowing momentum in the U.S. and other economies. The handoff from public to private spending looks to be going smoothly.”
The Canadian dollar was up sharply following the jobs report, up 1.24 cents to 97.03 cents US on growing conviction the Bank of Canada will raise rates for the second time this year on July 20.
The positive showing on the TSX comes after the Toronto market advanced the past three days, racking up almost 350 points as investors felt last week’s selloff of more than four per cent was overdone.
The cautiously upbeat tones were helped by a U.S. report showing a larger than expected drop in the number of newly laid-off people seeking unemployment benefits, and a strong outlook from American bank State Street.
The base metals sector was ahead 1.3 per cent with the September copper contract on the Nymex up four cents to US$3.05 a pound. On the TSX, Teck Resources (TSX:TCK.B) rose 78 cents to C$35.22 and Lundin Mining (TSX:LUN) gained five cents to $3.70.
The gold sector climbed 1.56 per cent as bullion prices headed higher with the August gold contract in New York up $13 to US$1,209.10 an ounce. Goldcorp Inc. (TSX:G) gained 84 cents to $43.14 and Barrick Gold Corp. (TSX:ABX) was ahead 79 cents to C$43.09.
The TSX energy sector was down 0.27 per cent with oil prices higher for a third day on indications of falling inventories in the U.S., which in turn led to hopes for higher demand. The August crude contract on the New York Mercantile Exchange gained 21 cents to US$75.65 a barrel. Canadian Natural Resources (TSX:CNQ) fell 28 cents to C$36.41.
The industrials sector was also weak with Canadian National Railways (TSX:CNR) down 84 cents to $60.31 after the stock was downgraded to neutral from overweight at JP Morgan.
New York markets were slightly higher with investors turning cautious before the start of the U.S. second quarter earnings reporting season next week.
The Dow Jones industrial average was 16.4 points higher to 10,155.3.
The Nasdaq composite index gained 5.66 points to 2,181.06 while the S&P 500 rose 1.45 points to 1,071.7.
In corporate news, auto parts giant Magna International Inc. (TSX:MG.A) says its shareholders will vote July 23 on a share restructuring that would see founder and chairman Frank Stronach give up control of the company in return for nearly $1 billion in stock, cash and incentives. The company had planned to conduct a vote in late June. But that was postponed after Magna was ordered by regulators to provide shareholders with more data on the plan before they could vote. Magna said it has now provided that information and its stock rose 53 cents to $69.48.
The head of new wireless provider Mobilicity says his company will pursue legal action under the Competition Act if Rogers Communications (TSX:RCI.B) launches its new discount service called Chatr. John Bitove alleges Rogers would have to subsidize the new service and is launching it only to stifle new competition. Rogers shares slipped 16 cents to $35.30.
Cameco (TSX:CCO) shares lost 46 cents to $23.13 as it announced that its 260 unionized employees at its conversion facility in Port Hope, Ont., have voted to accept a new collective agreement. The facility produces uranium dioxide, used to manufacture Candu reactor fuel, and uranium hexafluoride which, after further processing, becomes the fuel for most other types of nuclear reactors.
Asian markets moved higher after the Chinese central bank said monetary and fiscal policy will likewise remain accommodative in the second half of the year. The announcement eased some investors’ fears that authorities there were ready to tighten controls on the market to cool off the economy.
Investors were also pleasantly surprised by an interest rate hike in South Korea, viewing the move as a sign of confidence in the recovery.
South Korea’s Kospi advanced 1.4 per cent after the interest rate decision. The Shanghai Composite Index jumped 2.3 per cent, Japan’s Nikkei 225 stock average rose 0.5 per cent and Hong Kong’s Hang Seng was up 1.6 per cent.
London’s FTSE 100 index gained 0.47 per cent, Frankfurt’s DAX was ahead 0.35 per cent and the Paris CAC 40 was ahead 0.3 per cent.
