The Goldman Sachs report says there are three good reasons why Canadian markets follow U.S. cues.Kevin Van Paassen/The Globe and Mail
North American stocks posted slight gains at the start of trading on Friday, following the release of a decent U.S. payrolls report and relief over a successful government bond swap in Greece.
The Dow Jones industrial average rose 25 points or 0.2 per cent, to 12,933. The broader S&P 500 rose 4 points or 0.3 per cent, to 1,370. In Canada, the S&P/TSX composite index rose 10 points or less than 0.1 per cent, to 12,472.
The U.S. Labor Department reported that payrolls grew by 227,000 in February, down from a revised 284,000 job gains in January but slightly above economists' expectations. The unemployment rate held steady, at 8.3 per cent, which was also in line with expectations.
If equity investors seemed less-than-impressed with the report, gold reacted with more conviction: It fell to $1,685 (U.S.) an ounce, down $15 – apparently a reaction to dwindling hopes that the Federal Reserve would need to stimulate the economy. Gold has tended to perform well with Fed tinkering, based on fears of future inflation and a debasement of the U.S. dollar. Gold stocks also reacted: Barrick Gold Corp. fell 1.2 per cent.
However, U.S. banks moved higher. JPMorgan Chase & Co. rose 0.9 per cent and Bank of America Corp. rose 0.6 per cent. Commodity producers were also strong. DuPont rose 0.8 per cent and Alcoa Inc. rose 0.7 per cent.
Among Canadian stocks, energy producers rose as the price of crude oil nudged higher. Suncor Energy Inc. rose 0.5 per cent and Canadian Oil Sands Ltd. rose 0.9 per cent.
David Berman