TORONTO – The Toronto stock market closed modestly higher Friday amid a solid U.S. employment report for May and weak Canadian jobs data.
The S&P/TSX composite index was up 38.72 points to 14,838.9, weighed down by mining stocks as copper and gold prices lost ground.
The Canadian dollar was slightly lower as job creation figures for Canada came in above expectations, up 25,800 for the month.
But Statistics Canada said the gains were part-time and the unemployment rate edged up to seven per cent from 6.9 per cent as more Canadians went looking for work in May. The loonie was down 0.01 of a cent to 91.49 cents US.
The U.S. Labor Department said the American economy cranked out 217,000 jobs, roughly in line with expectations. That’s down from 282,000 in April, which was revised slightly lower. Despite the gains, the unemployment rate remained 6.3 per cent.
“It’s confirmation that things are, as expected, improving,” said Wes Mills, chief investment officer Scotia Private Client Group.
“The more disappointing numbers were the Canadian ones. The headline number looked OK but underneath, part-time jobs increased and full-time lost.”
In New York, the Dow Jones industrials gained 88.17 points to 16,924.28, the Nasdaq advanced 25.17 points to 4,321.4 and the S&P 500 index was ahead 8.98 points to 1,949.84.
Industrials led TSX gainers, up 1.3 per cent. Air Canada (TSX:AC.B) shares rocketed to a 52-week high amid an upgrades from Walter Spracklin of RBC Capital Markets. He boosted his target price for the airline by nearly 42 per cent to $17, saying the carrier is undergoing a fundamental and structural cost reduction initiative that is playing out in a climate of steadily increasing demand for air travel. Its shares closed up 54 cents to $10.47 after going as high as $10.58 on heavy volume of almost five million shares.
Commodity markets were mixed in the wake of the jobs data with July crude in New York 18 cents higher to US$102.66 a barrel.
The TSX energy sector was ahead 0.34 per cent as the Financial Times reported that EU officials have decided to change a draft of a fuel quality directive, something Canadian officials have lobbied their European counterparts to do. Proposed EU environmental legislation would have set heavy penalties on petroleum products made from Alberta’s oilsands, citing higher carbon emissions associated with its production.
There has been speculation in Ottawa that the crisis between Russia and Ukraine may have helped Canada’s cause. Prime Minister Stephen Harper has suggested that Europe should reduce its dependence on Russian energy supplies and look to Canada for some of its energy.
“It’s not so much that the oil wasn’t going to continue to be developed, it’s that the stocks were being shunned and also some environmentally-conscious funds would say, no, we don’t want to own them,” added Mills.
“And they may still say that but the fact that the Europeans… can’t depend on the Russians and they’re highly dependent at this point.”
The TSX was weighed down by a 1.87 per cent slide in the base metals sector, while July copper fell four cents to US$3.05 a pound.
The gold sector lost about 0.3 per cent as August bullion shed early gains to decline 80 cents to US$1,252.50 an ounce.
The TSX ended last week up 234 points or 1.6 per cent, leaving the Toronto market ahead 8.9 per cent year to date, led by gains in energy, mining and financials.
U.S. markets also gained ground last week with the Dow industrials ahead 1.24 per cent.