TSX rises as jobs data spur optimism
The Toronto stock market closed higher yesterday as investors reacted to better-than-expected August employment reports in Canada and the United States.
The S&P/TSX composite index closed up 95.98 points, or 0.88 per cent, to 11,017.47 for a gain of 39 points for the week.
The TSX Venture Exchange was up 13.74 points to 1,229.25. Statistics Canada said the economy added 27,100 jobs in August, much better than the loss of 22,000 jobs economists had expected.
The suggestion the Canadian economy is emerging from recession pushed the Canadian dollar up 1.38 cents (U.S.) to 92.02 cents.
"We had a very good rally in the dollar for the last six months or so," said Blair Falconer, portfolio manager at HSBC Securities.
"But the fact that employment in Canada has done well seems to be getting us back on that bullish track for the dollar."
The Canadian unemployment rate edged up a tenth of a point to 8.7 per cent, below expectations of a rise to 8.8 per cent, as more people entered the workforce.
"This report may not quite carry the good housekeeping seal of approval for the recovery, but it certainly is another big step in the right direction," said Doug Porter, BMO Capital Markets deputy chief economist auto loans.
"While we can quibble about the details, the broader picture here is that the labour market is stabilizing, and apparently much faster than in the U.S."
The U.S. economy lost 216,000 jobs last month against estimates of around 225,000, while the unemployment rate ticked two tenths of a point higher to 9.7 per cent – the highest rate since June 1983.
The mixed U.S. labour report contained enough kernels of hope to send stocks higher in light trading.
The Dow Jones industrial average was 96.66 points higher at 9,441.27.
The Nasdaq composite index moved up 35.58 points to 2,018.78, while the S&P 500 index added 13.16 points to 1,016.4.
On the TSX, the energy sector rose 1.53 per cent as the October crude contract on the New York Mercantile Exchange inched up six cents to $68.02 a barrel. But oil lost 6.5 per cent this week on demand concerns. The financial sector rose 1.3 per cent.
The gold sector was the major decliner, down 1.18 per cent as the December bullion contract slipped $1 to $996.70.
The Canadian Press
Filed under: economics by Specialist