TSX index lags American stock markets as U.S. jobs data impresses

TORONTO – North American stock markets finished the Friday session higher led by a gain of nearly 370 points on the Dow after another month of solid U.S. jobs growth.

Toronto’s S&P/TSX composite index was up 34.10 points to 13,358.77, ending the week of trading at practically the same level it began.

The Canadian dollar was down 0.21 of a cent at 74.76 cents U.S.

Wall Street posted even bigger gains during the session helped by November data, which showed a gain of 211,000 jobs in the United States, suggesting that an interest rate hike is in the cards from the Federal Reserve at its meeting later this month.

The Dow Jones closed ahead up 369.96 points at 17,847.63 while the broader S&P 500 index advanced 42.07 points to 2,091.69 and the Nasdaq rose 104.74 points to 5,142.27.

“I think the Fed wants to at least start the path towards normalizing rates, but the market is satisfied that it will be done in a very gradual fashion,” said Patrick Blais, managing director and senior portfolio manager at Manulife Asset Management.

“We’re sitting in a golden scenario where the U.S. economy is strong but not too strong.”

Canada’s economy is facing quite a different scenario.

Domestic employment figures gave traders little reason for optimism as temporary election-related jobs ran their course, leaving further proof the economy is struggling to grow.

Statistics Canada’s latest monthly jobs survey found the economy shed 35,700 jobs in November, while the unemployment rate crept higher by one tenth of a percentage point to 7.1 per cent.

Exports were also lower in October as the trade deficit grew to $2.76 billion.

On the commodity markets, gold prices moved higher with the February gold contract rising $22.90 to US$1,084.10 an ounce.

Oil prices took another hit after the Organization of the Petroleum Exporting Countries decided to maintain current production levels. The move will keep 31.5 million barrels a day running through the system, which practically ensures prices will stay near their current downtrodden level.

“Fundamentally we’re getting to the point where oil prices are close to reaching the bottom,” said Blais.

“It’s just a question of how long we stay in this depressed environment.”

January crude was down $1.11 at US$39.97 per barrel and the January contract for natural gas was up half a cent at US$2.19.

In corporate developments, Canadian Pacific Railway (TSX:CP) was dealt a blow to its US$28 billion takeover attempt of Norfolk Southern.

The company, one of the biggest rail operators in the U.S., rejected the offer, saying it was “grossly inadequate.”

CP Rail accused Norfolk Southern of mischaracterizing the deal. The Calgary-based company said it would offer a more detailed response Tuesday.

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