The Toronto stock market snapped a three-session losing run to close 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 closed up 101.39 points to 13,596.93.
The Canadian dollar tumbled 1.05 cents to 92.83 cents (U.S.), its lowest close since November, 2009, with the currency weakening amid data showing a growing trade deficit in November even as the greenback gained ground amid strong U.S. trade data.
Statistics Canada said the country’s trade deficit went from $908-million in October to $940-million in November as merchandise imports edged up 0.1 per cent while exports were unchanged.
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 had a negative start so far in 2014, but indexes closed firmly in positive territory Tuesday.
The Dow Jones industrials jumped 105.84 points to 16,530.94, the Nasdaq ran ahead 39.5 points to 4,153.18 and the S&P 500 gained 11.11 points to 1,837.88.
The most closely watched economic report of the week will come on Friday. Economists forecast that about 195,000 jobs were created in the United States in December.
The reading will help the Federal Reserve determine how quickly it withdraws from a key stimulus program, its US$85-billion of monthly bond purchases. The central bank said last month it would taper those purchases by $10-billion starting this month.
The greenback also strengthened a day before the release of the minutes from the Fed meeting last month.
Analysts suggest that the dollar could rally if the minutes showed strong support by the Fed at the end of last year to start tapering. Likewise, lukewarm support for tapering could push the U.S. currency lower.
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 run-up 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 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 1.5 per cent with BlackBerry registering a solid gain for a second day, up 63 cents to $9.14 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.
Celestica gained 16 cents to $11.45.
The energy sector rose 1.13 per cent as the February crude contract on the New York Mercantile Exchange rose 24 cents to $93.67 (U.S.) a barrel. Suncor Energy gained 59 cents to $37.17 (Canadian) while Imperial Oil advanced 60 cents to $46.58.
The consumer discretionary group was up 0.76 per cent thanks largely to gains in auto parts manufacturers. Magna International improved by $1.86 to $87.31 and Martinrea International climbed 10 cents to $8.08.
March copper was unchanged at $3.36 (U.S.) a pound and the base metals sector was flat as HudBay Minerals gained 15 cents to $8.61 (Canadian).
The gold sector moved into positive ground, up about 0.7 per cent with February bullion off $8.40 at $1,229.60 (U.S.) an ounce. Goldcorp added 22 cents to $24.12 (Canadian).
In other corporate news, shares in Valeant jumped $15.04 or 12.53 per cent to $135.03 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 a merger of equals.