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(FRANK GUNN/THE CANADIAN PRESS)
(FRANK GUNN/THE CANADIAN PRESS)

At midday: TSX rises amid upbeat U.S. data Add to ...

The Toronto stock market was higher Monday morning amid signs that the U.S. economy is on the right track to recovery with better-than-expected manufacturing data.

The S&P/TSX composite index climbed 23.71 points to 13,419.11, after a flat open. The Canadian dollar fell to its lowest intraday price since October 2011, as the loonie lost 0.20 of a cent to 93.96 cents U.S.

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Markets on Wall Street declined, with the Dow Jones industrials pulling back 29.60 points to 16,056.81, the Nasdaq dipping 2.92 points to 4,056.97, and the S&P 500 index falling 0.17 of a point to 1,807.76.

The Institute for Supply Management says its index of manufacturing activity rose in November to 57.3 as factories increased production, hiring and received a large number of orders. That figure is up from 56.4 in October and the highest since April 2011. A reading above 50 indicates growth.

Jennifer Dowty, an associate portfolio manager with CIBC Global Asset Management, said the latest reading confirms “continued evidence” that the U.S. economy is steadily recovering.

Investors in the U.S. are returning from a lacklustre Friday session, which was shortened due to the Thanksgiving holiday.

A survey released Sunday of 4,500 shoppers conducted for the National Retail Federation found that total spending in stores and online over the four-day long weekend was expected to fall for the first time ever since it began tracking it in 2006. The trade group says spending is expected to dip an estimated 2.9 per cent to $57.4 billion.

Dowty said U.S. investors are wary of making major moves until the latest payrolls data is released on Friday, which may provide more hints on whether the Federal Reserve will decide to cut back its US$85 billion of monthly bond purchases at its next meeting on Dec. 18. The Fed’s stimulus has kept interest rates low and helped drive equities markets higher this year.

The consensus is that the U.S. central bank will begin tapering in the new year, and not later this month. But positive payrolls figures, new home sales and the final revision to third quarter GDP, may have the potential to change the Fed’s mind.

In corporate news, Talisman Energy Inc. (TSX:TLM) says two representatives of activist investor Carl Icahn will join its board.

One of Icahn’s representatives will sit on the board committee searching for a successor to Hal Kvisle, who plans to step down as Talisman’s president and chief executive next year. Icahn revealed through regulatory documents in October that he had acquired about six per cent of Talisman’s stock, and has now increased his holdings to about seven per cent.

Last month, Talisman announced it would sell 75 per cent of its assets in northeastern B.C.’s Montney formation to Progress Energy Canada Ltd., a subsidiary of Malaysia’s Petronas, for $1.5 billion. Shares rose 3.38 per cent or 42 cents to $12.86.

The Toronto Stock Exchange saw gold, materials and metals and mining fall with the biggest declines. The gold sector was down 2.76 per cent, as February bullion dropped $22.60 to US$1,227.80 a barrel.

Dowty said this will likely continue.

“The U.S. economy is steadily recovering and gold, being a safe haven, is not a place that investors need to be right now,” she said. “You’re seeing pressure on gold.”

Other commodities were mixed as the January crude contract on the New York Mercantile Exchange climbed 92 cents to US$93.64 a barrel as the sector saw an uptick of 0.8 per cent. The metals and mining sector on the TSX fell 1.06 per cent as December copper dropped three cents to US$3.18 a pound.

It’s going to be a heavy earnings week as the country’s major banks report fourth-quarter and full-year results.

The Bank of Canada will also announce Wednesday whether its trend-setting rate remains at one per cent, where it’s been since late 2010.

In fact, many analysts don’t think the central bank will start raising rates until 2015 and some even think it could be persuaded to cut the overnight lending rate if inflation gets too low or the economy stalls.

 
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