The Toronto stock market was little changed late morning Friday as the TSX had a mixed reaction to stronger-than-expected Canadian and American employment data for May.
The S&P/TSX composite index was well off early lows but still dragged down by the gold and base metals sector. The TSX largely recovered from a 99-point slide and was down just 11.05 points to 12,398.28 late in the morning.
But the market found support from the non-resource sectors as Statistics Canada reported 95,000 jobs were created in May, most of them full-time positions. Also, the unemployment rate moved down to 7.1 per cent from 7.2 per cent.
Economists had expected job creation somewhere in the neighbourhood of 15,000 last month.
The Canadian dollar was off early highs but still up 0.5 of a cent to 97.97 cents (U.S.) following the strong jobs reports.
U.S. indexes surged as traders also took in a stronger-than expected read on American employment last month.
The Dow Jones industrials gained 175.89 points to 15,216.51 as the U.S. Labour Department said that 175,000 jobs were created during May.
The Nasdaq composite index was ahead 31.28 points to 3,455.33 while the S&P 500 index rose 16.33 points to 1,638.89.
The expectation had been for the U.S. economy would crank out about 165,000 additional jobs during May.
But analysts had worried even the modest expectation was doubtful after disappointing reads on private sector hiring from payroll firm ADP and the employment component of the Institute for Supply Management's index on the U.S. non-manufacturing sector.
Still, traders hoped the data wasn't strong enough to persuade the Federal Reserve to start tapering its economic stimulus program involving bond purchases. That quantitative easing program has kept interest rates low and also helped fuel a strong rally on stock markets this year, leaving the Dow industrials up a good 15 per cent year to date.
Markets have been volatile over the past couple of weeks after Fed Chairman Ben Bernanke said the U.S. central bank might pull back on its $85-billion-a-month bond-buying program — known as quantitative easing — if economic data, especially hiring, improves significantly. Other Fed officials have spoken about a winding down of asset purchases sooner.
"This market has been very hooked on QE and is very susceptible to a withdrawal, obviously," said Sid Mokhtari, market technician with CIBC World Markets.
"A whole bunch of newspapers in the U.S. and articles and journals, were talking about how the market is addicted to QE and it's referred to as crack and heroin and all these things. So it's natural for the market to feel that withdrawal or even the assumption of that kind of withdrawal."
While the Fed's quantitative easing program has of huge benefit to U.S. markets, the TSX continues to labour under falling gold prices and demand concerns for oil and metals, leaving the main index down around 100 points so far this year.
The gold sector was the leading TSX decliner Friday morning, down 3.5 per cent as the strong American jobs report sent August gold $30.40 lower to $1,385.40 (U.S.) an ounce. Barrick Gold Corp. lost 79 cents to $20.88 (Cdn).
The base metal group was down 0.8 per cent while copper fell four cents at $3.28 (U.S.) a pound and sector heavyweight Teck Resources gave back 47 cents to $26.29 (Cdn).
The telecom sector was down 0.35 per cent. The component has headed lower since earlier in the week after Industry Minister Christian Paradis said Mobilicity and other new wireless carriers won't be allowed to sell spectrum to big carriers. The move was a setback for Telus which had asked permission to acquire Mobilicity and its spectrum and its shares gave back 39 cents to $34.51.
Tech stocks led advancers with BlackBerry ahead 13 cents to $14.18 while CGI Group climbed 65 cents to $31.62.
Industrials also lent support, up 0.75 per cent as Canadian Pacific Railway advanced $2.69 to $131.49.
Financials also turned positive with Manulife Financial ahead 28 cents to $16.26.
July crude on the New York Mercantile Exchange gained 99 cents to $95.75 (U.S.) a barrel, leaving the energy sector ahead 0.16 per cent. Imperial Oil ran ahead 36 cents to $39.75 (Cdn).
European bourses turned higher following the release of the American jobs data with London's FTSE 100 index ahead 1.18 per cent while Frankfurt's DAX was up 1.95 per cent as Germany's central bank lowered its growth forecast for this year but said a recovery had already started, as evidenced by a rise in export and industry figures in Europe's largest economy.
The Bundesbank now expects the economy to grow by only 0.3 per cent in 2013, down from its December forecast of 0.4 per cent. But it noted that the economy is already showing signs of recovery, which it said would lead to robust economic expansion in 2014.
The Paris CAC 40 added 1.78 per cent.