The close: Banks, insurers push TSX higher

TORONTO — Reuters

Exterior of the Royal Bank Plaza towers at the corner of Bay St. and Wellington St. West in Toronto on April 17 2014. (FRED LUM/THE GLOBE AND MAIL)

Canada’s main stock index rose on Friday as gains in shares of banks and insurers helped overcome concerns about sluggish economic data.

Also providing support, Empire Company Ltd., operator of the Canadian grocery chain Sobeys Inc, jumped 4.6 per cent, to $70.82, after a brokerage upgraded the stock.

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Data on Friday showed Canadian industrial product prices unexpectedly fell in May, due largely to cheaper energy and a stronger currency.

Investors also paid attention to Iraq and Ukraine, which remain volatile but show signs of stabilization. The price of U.S. crude oil slipped.

New York indexes moved into positive territory late in the session amid data showing improving consumer sentiment.

The Dow Jones industrials edged up 5.71 points to 16,851.84 and the Nasdaq was up 18.88 points at 4,397.93. The S&P 500 index rose 3.74 points to 1,960.96 as the University of Michigan’s widely watched consumer sentiment index rose to 82.5, an improvement on the 81.9 reading that economists had forecast and up from a flash estimate of 81.2.

But the report failed to brighten the mood of investors who were rattled this week by a report showing the U.S. economy contracted by a much worse than expected 2.9 per cent in the first quarter.

Concerns deepened as other data this week contained disappointing readings on consumer spending and consumption.

The Toronto market has gained nearly 11 per cent since the start of the year, and investors are looking to see if there are enough catalysts that could push the market higher.

“We expect the market to be extremely volatile, but we believe the trend is still upwards,” said Irwin Michael, portfolio manager at ABC Funds. “We expect to see the Canadian stock market to close the year higher than where it is today.”

The Toronto Stock Exchange’s S&P/TSX composite index closed up 63.51 points, or 0.42 per cent, at 15,094.25. Nine of the 10 main sectors on the index were higher.

Financials, the index’s most heavily weighted sector, rose 0.6 per cent. Royal Bank of Canada advanced 0.9 per cent to $76.03, and Bank of Montreal added 0.9 per cent to $78.58.

Insurer Manulife Financial Corp was up 0.4 per cent to $21.21.

Shares of energy producers edged higher, with Suncor Energy Inc. climbing 0.5 per cent to $45.61 and Canadian Natural Resources Ltd. gaining 0.7 per cent to $48.85.

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