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Caterpillar trucks working in the oil sands in Alberta. (Caterpillar Inc.)
Caterpillar trucks working in the oil sands in Alberta. (Caterpillar Inc.)

At midday: TSX gains ground despite weak mining stocks Add to ...

The Toronto stock market was modestly higher Friday amid a solid U.S. employment report for May and weak Canadian jobs data.

The S&P/TSX composite index was up 26.44 points to 14,826.62, weighed down by mining stocks as copper and gold prices lost ground.

The U.S. Labor Department said the American economy cranked out 217,000 jobs, roughly in line with expectations. That’s down from 282,000 in April, which was revised slightly lower. Despite the gains, the unemployment rate remained 6.3 per cent.

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“It’s confirmation that things are, as expected, improving,” said Wes Mills, chief investment officer Scotia Private Client Group.

“The more disappointing numbers were the Canadian ones. The headline number looked OK but underneath, part time jobs increased and full time lost.”

The Canadian dollar was lower as job creation figures for Canada came in above expectations, up 25,800 for the month. But Statistics Canada said the gains were part-time and the unemployment rate edged up to seven per cent from 6.9 per cent as more Canadians went looking for work in May. The loonie dipped 0.04 of a cent to 91.46 cents (U.S.).

In New York, the Dow Jones industrials gained 70.6 points to 16,906.71, the Nasdaq advanced 25.38 points to 4,321.61 and the S&P 500 index was ahead 8.62 points to 1,949.08.

Industrials led TSX gainers, up one per cent with transportation giant Bombardier ahead nine cents to $3.82. The stock has taken a series of hits over the last month on worries about when its new CSeries jet will be delivered.

Commodity markets were mixed in the wake of the jobs data with July crude in New York 18 cents higher to $102.66 (U.S.) a barrel.

The TSX energy sector was ahead 0.25 per cent as the Financial Times reported that EU officials have decided to change a draft of a fuel quality directive, something Canadian officials have lobbied their European counterparts to do. Proposed EU environmental legislation would have set heavy penalties on petroleum products made from Alberta’s oil sands, citing higher carbon emissions associated with its production.

There has been speculation in Ottawa that the crisis between Russia and Ukraine may have helped Canada’s cause. Prime Minister Stephen Harper has suggested that Europe should reduce its dependence on Russian energy supplies and look to Canada for some of its energy.

“It’s not so much that the oil wasn’t going to continue to be developed, it’s that the stocks were being shunned and also some environmentally conscious funds would say, no, we don’t want to own them,” added Mills.

“And they may still say that but the fact that the Europeans . . . can’t depend on the Russians and they’re highly dependent at this point.”

The TSX was weighed down by a 1.65 per cent slide in the base metals sector, while July copper fell five cents to $3.04 (U.S.) a pound.

The gold sector lost 0.45 per cent as August bullion shed early gains to decline $2.50 to $1,250.80 an ounce.

Meanwhile, traders looked ahead to a raft of key Chinese data coming out next week including readings on inflation, trade and retail sales.

Ahead of those reports, The World Bank and the International Monetary Fund are urging China to focus on controlling risks from rapidly rising debt due to its reliance on credit-fuelled growth. The comments add to warnings by private sector analysts that China’s run-up in debt, especially since the 2008 global crisis, could lead to financial problems and disrupt economic growth that already is slowing.

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