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At midday: TSX hits fresh all-time high on U.S. jobs data

Fred Lum/The Globe and Mail

The Toronto stock market was at another all-time high Thursday as job creation data from the United States blew past expectations and raised hopes for a stronger showing by the economy in the second quarter.

The S&P/TSX composite index gained 41.98 points to 15,238.78 as the Labor Department reported that the American economy cranked out 288,000 jobs during June, while the U.S. jobless rate edged down to 6.1 per cent from 6.3 per cent.

Economists had forecast that about 215,000 jobs were cranked out in June but those estimates ticked higher Wednesday after payrolls firm ADP reported that the private sector created 281,000 jobs in June, much higher than the 205,000 reading that had been forecast.

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Canadian employment data for June will be released July 11.

U.S. indexes were also positive with the Dow Jones industrials trading above the 17,000-mark for the first time, up 65.28 points to 17,041.52, the Nasdaq rose 18.32 points to 4,476.05 while the S&P 500 index was ahead 6.9 points to 1,981.52.

The jobs data also persuaded analysts that damage to the U.S. economy in the first quarter was contained and second-quarter performance will be much more impressive. The economy contracted by 2.9 per cent in the quarter, largely because of severe winter weather.

"I think it will definitely reverse itself," said Allan Small, senior adviser at HollisWealth.

"The U.S. will continue to gain strength as the year moves forward and I think that will factor into our markets. A stronger U.S. dollar, a stronger economy, a rise in interest rates on the 10-year Treasury, I think these things will affect our economy, affect things like gold and the price of oil – commodities affected by a higher U.S. dollar."

The Canadian dollar was up 0.17 of a cent to 93.92 cents (U.S.) as other data showed that Canada's trade deficit with the world narrowed during May. Statistics Canada said the deficit came in at $152-million, down sharply from $961-million in April, thanks in large part to a strong showing by the auto sector.

In the U.S., the trade deficit narrowed 5.6 per cent in May to $44.4-billion as exports hit an all-time high.

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New York markets close at 1 p.m. EDT and remain shuttered Friday for Independence Day.

The base metals sector led advancers, up two per cent while September copper was a cent higher at $3.26 a pound.

The financials sector was also a major gainer, up 0.75 per cent.

The gold sector was a major weight on the TSX, down 1.4 per cent as the jobs data pushed August bullion down $9.40 to $1,321.50 an ounce.

"When the U.S. economy is gaining strength, that's when you see the price of gold drop," added Small.

"It was no coincidence that the price of gold reached $1,900 when the economy was in the dumps, when people were making the comments that the U.S. dollar wasn't worth the paper it was written on, that's when you saw gold go higher. Now we're seeing the opposite."

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The energy sector was flat as August crude moved down 50 cents to $103.98 a barrel.

On the corporate front, BlackBerry slipped four cents to $11.35 as the smartphone maker said that it is selling its research and development department in Germany to Volkswagen Infotainment, a subsidiary of the automaker that makes interactive technology built into vehicle dashboards. The move comes as BlackBerry pushes ahead with a plan to become profitable by its 2016 financial year.

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