The Toronto stock market moved higher Tuesday amid a heavy slate of economic data coming out this week and hopes for strong fourth quarter earnings.
The S&P/TSX composite index gained 111.18 points to 13,606.72, following three days of losses.
The Canadian dollar tumbled almost a full cent to hover around a 3 1/2 year low, down 0.91 of a cent to 92.97 cents (U.S.) as the greenback gained ground amid strong trade data.
Traders also took in a report showing a growing trade deficit in Canada during November. Statistics Canada said the country’s trade deficit went from $908-million in October to $940-million in November. While Canada’s merchandise imports edged up 0.1 per cent with exports unchanged in November.
Meanwhile, the U.S. trade deficit fell in November to its lowest level in four years as gains in energy production and stronger sales of American-made airplanes, autos and machinery lifted exports to an all-time high.
The trade gap dropped 12.9 per cent to $34.3-billion (U.S.) in November as exports rose 0.9 per cent, aided by a 5.6 per cent rise in petroleum exports. Imports dropped 1.4 per cent.
U.S. markets have also had a negative start so far to 2014 trading but indexes were firmly in positive territory Tuesday morning.
The Dow Jones industrials jumped 117.33 points to 16,542.43, the Nasdaq ran ahead 36.8 points to 4,150.48 and the S&P 500 index gained 11.42 points to 1,838.19.
North American markets had finished lower Monday in the wake of data showing the U.S. service sector still expanding during last month but at a slower pace.
The most closely watched economic report of the week will come on Friday. Economists forecast that about 195,000 jobs were created during December in the United States.
The reading will help the Federal Reserve determine how quickly it withdraws from a key stimulus program, its $85-billion (U.S.) of monthly bond purchases. The central bank said last month it would taper those purchases by $10-billion starting this month.
Traders also looked to the release of the minutes from the Fed meeting last month for clues on further tapering along with its latest reading on the economy.
Thursday marks the start of what will be a flood of fourth-quarter corporate earnings over the next few weeks with resource giant Alcoa leading off.
Investors hope earnings will help justify the sharp 30 per cent runup in the S&P 500 last year. But there has been a steady drip of revised expectations recently.
“I don’t think they’re going to be as bad as the naysayers want to make out they are,” said Fred Ketchen, manager of equity trading at ScotiaMcLeod.
“There has been enough caution expressed that when we really get into some of the numbers as we go through the first quarter and even into the second quarter, it wouldn’t surprise me if they show up a little bit better than expected.”
Earnings from S&P 500 companies are expected to have risen 6.3 per cent in the fourth quarter. That’s slower than the 9.3 per cent growth analysts expected, on average, at the end of September, according to FactSet.
That would follow third quarter profit growth of $39.2-billion, compared with a gain of $66.8-billion in the second quarter.
The tech sector led TSX advancers, up 1.4 per cent with BlackBerry registering a solid gain for a second day, up 50 cents to $9.01 after CEO John Chen told Bloomberg TV that the smartphone maker plans to re-focus on keyboard-equipped phones. Chen said the company’s phones will ”predominantly” have physical keyboards in the future, rather than touch screens.
The energy sector rose 1.3 per cent as the February crude contract on the New York Mercantile Exchange rose 43 cents to $93.86 (U.S.) a barrel. Suncor Energy gained 61 cents to $37.19 while Imperial Oil advanced 60 cents to $46.58.
The consumer discretionary group was up one per cent as auto parts giant Magna International improved by $2.05 to $87.50 and Hudson’s Bay Co. climbed 44 cents to $18.71.
March copper was a penny lower at $3.34 (U.S.) a pound and the base metals sector edged up 0.5 per cent as HudBay Minerals gained nine cents to C$8.55.
Gold stocks led decliners, down 0.9 per cent with February bullion down $11.20 to $1,226.80 (U.S.) an ounce. Kinross Gold faded five cents to C$4.86 and Barrick Gold declined 21 cents to $19.37.
In other corporate news, shares in Valeant jumped $11.75 or 9.8 per cent to $131.74 after the pharmaceutical company said Tuesday that it expects revenue of between $8.2-billion to $8.6-billion for fiscal 2014, an increase of 40 per cent, and cash earnings between $8.25 and $8.75 (U.S.) per share. It adds it will continue to look for a big acquisition or merger of equals.