Frank Gunn/The Canadian Press
North American stock markets opened higher, finding encouragement from an unexpected drop in the U.S. trade deficit and more data from China overnight confirming its economy has picked up its pace.
The loonie was licking its wounds after plunging about half a cent to below parity on surprisingly weak jobs and housing reports in Canada.
In early trading, the S&P/TSX composite index was up 46 points, or 0.3 per cent, at 12,802 while the S&P 500 was up 8 points, or 0.5 per cent, at 1,517. The Dow Jones industrial average was up 66 points, or 0.4 per cent, to above the 14,000 level again. It rose as high as 14,018.85 this morning, coming within 1 point of a fresh five-year high.
The Nasdaq was up 28 points, or 0.8 per cent, at 3,193, leading the charge higher after a number of strong earnings reports from tech firms, including AOL and LinkedIn.
The U.S. trade deficit shrank to $38.5-billion in December, as imports dropped sharply, well below the average analyst estimate of $45.4-billion. The report suggests the economy in the fourth quarter of last year - which GDP figures earlier suggested slightly contracted - may not have been that weak after all.
Canada's trade deficit in December also suggested the economy here was humming along. The deficit almost halved to $901-million (Canadian) from the previous month as imports dropped at a faster pace than exports. Economists had expected a deficit of $1.36-billion after a $1.67-billion shortfall in November.
But other Canadian data this morning weren't nearly as uplifting.
Statistics Canada said 22,000 jobs were lost last month, instead of the 5,000 jobs gains economists had forecast. Most jobs lost were in the public sector. The unemployment rate dipped to 7 per cent from 7.1 per cent as more people started looking for work.
And Canada Mortgage and Housing Corp. said housing starts plummeted 18.5 per cent in January, much steeper than expected by economists. The number of starts sunk to 160,577 units during the month, down from 197,118.
European stocks are modestly higher today after Germany reported that 2012 saw the nation's second highest trade surplus ever, a sign that Europe's largest economy is still strong despite the debt crisis in the euro zone.
Elsewhere, the Japanese market suffered losses of almost 2 per cent overnight, and for the week was down 0.3 per cent - its first negative return in 13 weeks. The Nikkei was under pressure today after a disappointing fourth-quarter report from Sony Corp, with shares skidding 10.1 per cent as the consumer electronics company announced its eighth straight quarterly loss.
But what really spooked investors there were comments from Japanese Finance Minister Taro Aso, who said that the pace of the yen's weakening has been too fast. The yen slumped 13 per cent since mid-November as traders bet on aggressive monetary stimulus measures from the country's new prime minister, Shinzo Abe. The yen rose as much as 1.6 per cent against the U.S. dollar overnight after Mr. Aso's comments, its biggest gain since March 2011. A weaker yen is key in providing the country's heavily export-oriented economy a boost.
Chinese stocks saw modest gains today after data for January showed the nation's consumer price index rising 2 per cent last month from a year earlier, less than the 2.5 per cent inflation bump seen in December. Trade data also showed exports climbing 25 per cent in January and imports rising 28.8 per cent, making for a trade surplus of $29.2-billion. The data beat economists' expectations and continued to indicate solid growth in the Chinese economy.
Here's a look at some stocks moving on news this morning:
LinkedIn Corp. shares are up 17 per cent after the company reported late Thursday better-than-expected profit and revenues in its latest quarter.
Activision Blizzard Inc. shares are up nearly 10 per cent after the video game publisher reported earnings and revenues ahead of Street forecasts.
AOL Inc. shares are up nearly 10 per cent after the portal reported its best quarterly revenue growth in eight years because of strong search and third-party network advertising sales. It also announced a share buyback.
Heroux-Devtek Inc. reported a lower profit for the fourth quarter, following the sale of a large portion of its manufacturing operations last year. But shares opened down about 1 per cent.
Darcy Keith