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At midday: S&P 500 holds gains after payrolls report

Before trading began, the U.S. Department of Labor reported that payrolls expanded by 236,000 jobs in February – nearly double the previous month’s gains and well ahead of expectations for 165,000 gains. The unemployment rate fell to a four-year low of 7.7 per cent, from 7.9 per cent.

BRIAN SNYDER/REUTERS/BRIAN SNYDER/REUTERS

U.S. stocks were up modestly in midday trading on Friday, following an upbeat reading on February payrolls. But Canadian stocks dipped slightly.

The S&P 500 was up 5 points or 0.3 per cent, to 1549. The blue-chip Dow Jones Industrial Average was up 50 points or 0.4 per cent, to 14,379. In Canada, the S&P/TSX composite index was down 21 points or 0.2 per cent, to 12,806.

Before trading began, the U.S. Department of Labor reported that payrolls expanded by 236,000 jobs in February – nearly double the previous month's gains and well ahead of expectations for 165,000 gains. The unemployment rate fell to a four-year low of 7.7 per cent, from 7.9 per cent.

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While gains within the S&P 500 were slight, there was a clear preference for economically sensitive stocks, at the expense of defensive stocks.

Industrials, consumer discretionary and materials stocks led the gains, rising 0.7 per cent each. Defensive consumer staples and utilities fell slightly.

Financials were flat, following the release of much-anticipated stress test results from the Federal Reserve on Thursday, after markets closed: 17 of the 18 largest financials passed the tests, suggesting they have enough capital to survive a sharp economic downturn. The results could pave the way toward bigger dividends when announcements are made next week.

McDonald's Corp. rose 1.5 per cent after reporting that its February sales, in stores open for at least one year, fell 1.5 per cent – but nonetheless topped expectations.

Within Canada's benchmark index, materials rose 0.6 per cent and consumer staples rose 0.3 per cent. However, the index was dragged down by industrials, financials and energy stocks.

Among key commodities, crude oil fell 32 cents (U.S.), to $91.24 a barrel. Gold fell $1, to $1,578 an ounce.

In Europe, the U.K.'s FTSE 100 rose 0.7 per cent and Germany's DAX index rose 0.6 per cent.

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After the close of European trading for the week, Fitch Ratings downgraded Italy's credit rating to triple-B-plus with a negative outlook.

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