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The close: Dow, TSX end with big job-fuelled gains

In this March 7, 2012, file photo shows job seekers standing line during the Career Expo job fair, in Portland, Ore.

Rick Bowmer/AP

Surprisingly strong U.S. job gains last month and a decent reading on service-sector activity propelled North American stocks on Friday.

The Dow Jones industrial average closed at 13,096.17, up 217.29 points or 1.7 per cent.

The broader S&P 500 closed at 1,390.99, up 25.99 points or 1.9 per cent.

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In Canada, the S&P/TSX composite index closed at 11,662.59, up 156.09 points or 1.4 per cent.

The gains followed a flurry of upbeat economic news from the United States. The U.S. Labor Department's payrolls report showed that employers added 163,000 jobs in July.

That was well ahead of expectations for gains of 100,000. It also snapped a dismal stretch in which previous monthly reports had been showing lacklustre employment gains.

Meanwhile, the ISM non-manufacturing report for July, which followed a disappointing report on manufacturing activity this week, came in at 52.6 – in line with expectations and well within expansion territory for services sector activity.

The good news on the U.S. economy was strong enough to overshadow disappointments earlier in the week when the Federal Reserve and the European Central Bank dashed expectations that they were close to taking decisive action in providing stimulus to their respective economies.

The Canadian dollar surged, touching parity with the U.S. dollar earlier in the day.

Commodity prices jumped. Crude oil rose to $91.40 (U.S.) a barrel, up $4.27 for its biggest one-day gain since the end of June. Gold rose to $1,609.30 an ounce, up $18.80.

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Among Canadian commodity producers, Suncor Energy Inc. rose 3.6 per cent and Barrick Gold Corp. rose 1.2 per cent.

SNC-Lavalin Group Inc. fell 5 per cent after it reported that its quarterly earnings fell to 21 cents (Canadian) a share from 67 cents a share last year, missing expectations by a long shot.

The company, beset by a financial scandal, high-level resignations and allegations of corruption, also lowered its full-year earnings guidance.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More


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