The Toronto stock market was higher for a sixth session with most sectors showing gains at midday Tuesday as traders sensed that the TSX has turned the corner amid improving global economic conditions.
Traders also took in weaker than expected U.S. jobs data that suggested the Federal Reserve likely is in no rush to start winding up a key element of economic stimulus.
The S&P/TSX composite index climbed 67.86 points to 13,254.39, its highest level since July 2011, led by mining stocks.
The U.S. Labour Department said job creation for September came in at 148,000 while the jobless rate dipped 0.1 per cent to 7.2 per cent. Economists had been looking for job gains in the neighborhood of 180,000.
Also, August job creation was revised upward from 169,000 to 193,000.
The report was to have been released weeks ago but got held up because of the partial U.S. government shutdown, which ended last week.
There has been growing speculation since May about when the Fed might start to taper its monthly purchase of US$85-billion of assets that have kept interest rates low and supported strong gains on many equity markets this year.
“If there was any doubt that that wasn’t to occur in the fourth quarter I think basically today has removed that uncertainty entirely,” said Stephen Lingard, portfolio manager at Franklin Multi-Asset Strategies.
“It is a 2014 story because underlying economic growth is not too strong, it really is on the precipice of being too weak, payrolls still haven’t recovered from the great financial recession.”
The Canadian dollar was up 0.15 of a cent at 97.23 cents US as other data showed that retail sales edged up 0.2 per cent during August to $40.3-billion. Economists had expected a gain of 0.3 per cent.
New York gained momentum as other data showed that spending on U.S. construction projects rose at a solid pace in August, helped by further gains in residential building. Overall construction activity climbed to the highest level in more than four years.
Construction spending increased 0.6 per cent in August compared with July.
The Dow Jones industrials moved up 52.94 points to 15,445.14, the Nasdaq slipped 3.54 points to 3,916.51 and the S&P 500 index added 5.52 points to 1,750.18.
The TSX gold sector led advancers, up 4.5 per cent while December bullion advanced $27.30 to US$1,343.10 an ounce. Barrick Gold (TSX:ABX) jumped $1.20 to C$20.46 and Goldcorp (TSX:G) ran up $1.10 to $26.83.
The base metals sector gained 2.65 per cent as the December copper contract on the Nymex rose three cents to US$3.34 a pound. Teck Resources (TSX:TCK.B) rose 95 cents to $29.50.
The financials sector was ahead 0.45 per cent while CIBC (TSX:CM) improved by $1.22 to $86.57.
The energy component turned lower, down 0.2 per cent as oil prices gave up early gains after other data showed rising inventories. The U.S. government said Monday, in a report delayed five days due to the government shutdown, that U.S. crude supplies rose by four million barrels in the week ended Oct. 11.
The November crude contract on the New York Mercantile Exchange was 82 cents lower to US$98.40 a barrel. Canadian Natural Resources (TSX:CNQ) shed 47 cents to C$33.29.
Techs also turned lower with CGI Group (TSX:GIB.A) down 88 cents to $35.87.
Traders also also focused on earnings news this week.
After the close Monday, Netflix reported that earnings quadrupled as the Internet video subscription service’s line-up of original programming helped attract 1.3 million more U.S. subscribers during its latest quarter. Netflix earned $32-million, or 52 cents per share, four cents higher than estimates.
Revenue rose 22 per cent from last year to $1.1-billion to match analyst projections but its stock turned negative late in the morning, losing $12.99 or 3.66 per cent to $342 after earlier running up as high as $389.16.
In Canada, traders will take in earnings after the close from Canadian National Railways (TSX:CNR). Canadian Pacific Railway (TSX:CP) reports on Wednesday and both are expected to show rising revenues from greater shipments of crude oil. CN was down 46 cents to $109.44 and CP slipped 26 cents to $133.98.
The string of gains on the TSX through late October has left the main index up 6.6 per cent year to date, with advances this month led by the gold, base metals and financial sectors.
“I don’t know if we would definitively signal the all-clear but this Canadian market underperformance that we have seen we do think is getting long in the tooth,” added Lingard.
“It feels like we could be nearing an inflection point where at least Canada isn’t a significant underperformer as it has been lately.”
European bourses were positive as London’s FTSE 100 index gained 0.9 per cent, Frankfurt’s DAX advanced 1.2 per cent while the Paris CAC 40 was ahead 0.6 per cent.