Stock markets higher on U.S. employment, manufacturing data; BlackBerry rises

TORONTO – The Toronto stock market was higher Friday as U.S. job creation data and a strong showing in the American manufacturing sector raised hopes that indexes can build on strong January gains.

The S&P/TSX composite index rose 83.59 points to 12,768.83 while the TSX Venture Exchange was ahead 6.95 points at 1,228.66.

The U.S. Labour Department’s non-farm payrolls report said the American economy created 157,000 jobs in January. It also significantly revised upward the number of jobs created in November and December, with a total of 127,000 more jobs created than initially thought.

Still, the jobless rate rose 0.1 of a point to 7.9 per cent.

Sentiment was further improved as a key reading on manufacturing came in much better than expected.

The Institute for Supply Management’s index came in at 53.1 in January, up from 50.2 in December, to the highest level since April. Economists had expected a read of 50.5.

The Canadian dollar was unchanged at 100.27 cents US, after the loonie closed above parity on Thursday for the first time in a week.

U.S. indexes were sharply higher as the Dow Jones industrials ran ahead 149.21 points to 14,009.79, closing above the 14,000 level for the first time since October 2007.

The Nasdaq gained 36.97 points to 3,179.1 while the S&P 500 index rose 15.06 points to 1,513.17.

“The January report was pretty solid,” said BMO Capital Markets senior economist Sal Guatieri.

“Solid upward revisions in the previous months paint the labour market in a much brighter hue than previously thought.”

Expectations had varied for job creation, ranging from estimates of 155,000 a week ago and rising as high as 170,000 in the last couple of days.

The positive jobs reading helped reassure investors, who had been surprised by data released Wednesday showing the U.S. economy shrank in the fourth quarter at an annualized rate of 0.1 per cent.

The TSX was up a shade over two per cent in January while the Dow industrials jumped about 5.75 per cent as corporations delivered some better than expected earnings reports and U.S. politicians stopped the economy from going over the so-called fiscal cliff and agreed to an extension of the debt limit. There were also signs that China’s economy is reviving.

BlackBerry, the company formerly known as Research In Motion Ltd. (TSX:RIM)(Nasdaq:RIMM), rose nine cents or 0.7 per cent to $13.01 after tumbling 17 per cent over the previous two sessions following the rollout of its new BlackBerry 10 lineup.

Part of the reason for the slide had been profit-taking after the stock ran up 50 per cent in January alone, and up 200 per cent from its 52-week low of $6.10 in September. But availability has become an issue as U.S. customers won’t be able to get the BlackBerry Z10 until March, a month later than in Canada.

In earnings news, Exxon Mobil said fourth-quarter earnings rose six per cent to US$9.95 billion with help from higher profit margins in its refining business. Net income equalled $2.20 per share, compared with $1.97 per share a year earlier. Revenue was down five per cent to $115.17 billion,

Analysts expected Exxon Mobil Corp. to earn $1.99 per share on revenue of $115.22 billion and its shares added seven cents to US$90.04 in New York.

Its Canadian subsidiary, Imperial Oil (TSX:IMO), reported higher net income in the fourth quarter as lower expenses more than offset a decrease in revenue. Imperial said its net income in the latest period was $1.07 billion or $1.26 per diluted share. That was up seven per cent from last year’s $1.01 billion, or $1.18 per diluted share. Revenue fell to $7.8 billion from $8.1 billion and its shares were 11 cents higher to C$43.91.

The gold sector led advancers, up about 1.5 per cent as April bullion on the New York Mercantile Exchange rose $8.60 to US$1,669.50 an ounce. Iamgold Corp. (TSX:IMG) improved by 16 cents to C$8.35.

Metal and oil prices headed higher in the wake of the U.S. economic data and the base metals sector was up 1.32 per cent while March copper was up five cents to US$3.78 a pound. Teck Resources (TSX:TCK.B) was ahead 65 cents at C$37.

The energy sector climbed 0.35 per cent with the March crude contract in New York turning positive following the release of the U.S. manufacturing data, up 28 cents at US$97.77 a barrel. Suncor Energy (TSX:SU) advanced 52 cents to C$34.42.

Financials also provided lift as Royal Bank (TSX:RY) moved up 42 cents to $62.54.

The TSX ended the week down a slight 0.36 per cent while the Dow industrials gained 0.81 per cent.

In other earnings news, Montreal-based paper maker Domtar Corp. (TSX:UFS) said quarterly net income dropped to US$19 million or 54 cents per share in the three months ended Dec. 31, from US$61 million, or $1.63 per share, in the fourth quarter of 2011. Domtar’s revenue fell about $70 million to $1.33 billion. Adjusted earnings dropped to $46 million or $1.31 per share, nine cents below expectations and Domtar shares fell $4.96 to $78.04.