The Toronto stock market was positive Friday with a good-sized chunk of gains from the gold sector as bullion prices advanced amid disappointing jobs data from Canada and the U.S.
The S&P/TSX composite index gained 74.7 points to 13,704.11, as traders contended with a major miss in Canadian jobs creation.
The Canadian dollar was off the lowest levels of the session but still down 0.48 of a cent to 91.67 cents (U.S.) as Statistics Canada reported that the economy shed 45,900 jobs last month, a major miss as economists had expected that the economy had created about 14,600 jobs.
Meanwhile, Wall Street was mainly lower after the U.S. Labor Department said the economy cranked out only 74,000 jobs as opposed to the 200,000 level that economists had forecast.
The Dow Jones industrials declined 19.98 points to 16,424.78 even as investors weighed the possibility that the Federal Reserve won’t be in any rush to accelerate its program for cutting back on a key stimulus program.
The Nasdaq was ahead 0.95 of a point to 4,157.15 and the S&P 500 index slipped 1.02 points to 1,837.11.
Expectations had been ratcheted up after payroll firm ADP reported Wednesday that the private sector alone created 238,000 jobs last month, while other data Thursday showed a continuing decline in those filing for jobless benefits.
Traders hoped that the U.S. jobs data will provide some direction on how the Fed plans to proceed on further tapering to its massive monthly bond purchases. The central bank decided in December to cut the key stimulus program from $85-billion a month to $75-billion, making further cuts contingent on economic performance, particularly the job market. The change came into effect this month.
Investor sentiment has been heavily dependent on how the market sees the prospects for tapering, a possibility first raised in May by outgoing Fed president Ben Bernanke. Many traders worried about the prospect of lower stimulus because much of the rally in global stocks over the past few years has been driven by the Fed’s policy, which has kept long-term interest rates at historic lows.
Other recent economic data have painted a picture of a U.S. economy that is steadily improving. Exports hit a record level in November, lowering the U.S. trade deficit; businesses have ordered more manufactured goods and auto sales reached a six-year high in 2013.
Analysts now estimate that the economy expanded at a healthy annual rate of three per cent to 3.5 per cent in the October-December quarter, up from earlier forecasts of a rate of two per cent or less.
The gold sector led TSX gainers, up 3.6 per cent as uncertainty about the Fed’s intentions sent bullion prices higher. The February bullion contract in New York rose $15.10 to $1,244.50 (U.S.) an ounce. Barrick Gold gained 67 cents to $19.91 (Canadian) while Goldcorp was $1.09 higher to $25.40.
The base metals sector was also a major advancer, up 1.3 per cent as March copper gained four cents to US$3.34 a pound. Teck Resources was up 56 cents to $26.28 as uncertainty about the Fed’s intentions sent bullion prices higher and HudBay Minerals edged up 16 cents to $8.73.
Rail stocks rose alongside miners with Canadian National Railways ahead 74 cents to $59.31 while Canadian Pacific Railway rose $2.46 to $163.65.
The energy sector climbed 0.65 per cent with the February crude contract on the New York Mercantile Exchange ahead 91 cents to $92.57 (U.S.) a barrel. Canadian Natural Resources improved by 80 cents to $35.91.
In earnings news, shares in resource giant Alcoa Inc. fell 5.8 per cent to $10.07 (U.S.) in New York after it reported a $2.34-billion fourth-quarter loss. The company wrote down the value of years-old aluminum-smelting acquisitions to shift its focus to more profitable businesses. Ex-items, Alcoa earned four cents a share, two cents below expectations. Its $5.59-billion in revenue beat the forecast of $5.36-billion from analysts surveyed by FactSet.
Sears Holdings Corp.’s shares plummeted 13.4 per cent to $36.87 in New York after the U.S. retailer and parent of Sears Canada said it expects a hefty loss for the fourth quarter and full year as sales during the critical holiday season dropped sharply. The retailer said its Kmart and Sears chains combined had a 7.4 per cent drop in revenue from stores open at least a year for the nine-week period ended Jan. 6. For Sears Canada, that figure was down 4.4 per cent. Sears Canada shares inched up five cents to $12.95 (Canadian).
European bourses registered solid gains as London’s FTSE 100 index climbed 0.64 per cent, Frankfurt’s DAX was ahead 0.32 per cent and the Paris CAC 40 advanced 0.5 per cent.