TORONTO – The Toronto stock market closed higher Thursday amid corporate dealmaking and some positive American employment news.
The S&P/TSX composite index rose 87.25 points to 12,845.06 in a broad-based runup led by rising financials.
U.S. private equity firm Directional Aviation Capital is buying Bombardier’s (TSX:BBD.B) Flexjet fractional business aircraft ownership service for US$185 million. The new owners are also ordering up to 245 Bombardier aircraft in a deal that’s valued up to US$5.2 billion.
Bombardier was ahead 26 cents or 5.5 per cent to C$4.98.
BlackBerry (TSX:BB) was another TSX driver, up 32 cents to $11.60 after the Wall Street Journal reported that the smartphone maker had narrowed the list of possible bidders for all or part of the company, and hopes to wrap up the auction by November.
The Canadian dollar lost 0.13 of a cent to 95.18 cents US ahead of the release of the August employment from Statistics Canada.
U.S. indexes chalked up minor gains as traders digested positive jobs data a day before the U.S. Labor Department’s release of employment data for August.
The Dow Jones industrials gained 6.61 points to 14,937.48 as payroll firm ADP reported that the American private sector created 176,000 jobs last month.
Economists believe that the government report will show the U.S. economy cranked a total of about 180,000 jobs in August.
“The headline number could easily come in better but when you drill down, the quality of the number won’t be quite as good, possibly and then you’ll say, ‘OK, it’s better but we see what is going on here,’” said Wes Mills, chief investment officer Scotia Asset Management.
“Everyone is going to focus on the full-time versus part-time because the Obama (health) care plan has been encouraging people to lay off full-time (workers) and hire more part time.”
Also, the number of Americans seeking unemployment benefits dropped 9,000 last week to a seasonally adjusted 323,000, near the lowest level since June 2008.
And the Institute for Supply Management said Thursday that its service-sector index rose to 58.6 in August from 56 in July, it’s highest point since December 2005. A measure of hiring in the index rose to 57, the most in six months.
The Nasdaq gained 9.74 points to 3,658.78 and the S&P 500 index climbed two points 1,655.08.
The jobs numbers out Friday may determine if or how much the U.S. Federal Reserve pulls back on the asset purchases that have kept long-term rates low and supported a rally on many stock markets this year.
Markets have been preoccupied this week with the prospect of the U.S. leading a military strike against the regime of Syrian President Bashar Assad, which it accuses of using deadly sarin gas against civilians. President Barack Obama is seeking U.S. congressional approval for such a strike and a vote could come as soon as next week.
Financials were the biggest TSX gainer, up 1.37 per cent as Royal Bank (TSX:RY) advanced $1.08 to $66.56.
Oil prices rose after the government said that supplies of oil and gasoline each fell by 1.8 million barrels in the week ended Aug. 30. The drop in gasoline supplies was greater than expected, and refinery usage increased, both signs perhaps of solid demand for fuel.
October crude on the New York Mercantile Exchange ahead $1.14 to US$108.37 a barrel and the energy sector gained per 1.26 cent. Imperial Oil (TSX:IMO) was ahead 83 cents to C$45.45.
Other commodities were lower as December copper closed unchanged at US$3.24 a pound. The base metals sector rose 0.6 per cent and First Quantum Minerals (TSX:FM) was 22 cents higher at C$18.15.
Gold stocks were the biggest TSX weight, down about three per cent as December bullion declined $17 to US$1,373 an ounce. Goldcorp (TSX:G) was down $1.02 to C$30.48.
A U.S. hedge fund is making a renewed call for changes at Barrick Gold (TSX:ABX), calling for the breakup of the company and the addition of a mining engineer and geologist to its board. Mike Morris, principal and founder of Two Fish Management, says that there is no compelling reason for Barrick to own a worldwide conglomerate of gold mines. Barrick edged 45 cents lower to $19.95.