Markets up on metals, mining sectors
The Toronto stock market got a bump on Friday as strength in the metals and mining and energy sectors helped overshadow a weak U.S. jobs report.
The S&P/TSX composite index reversed an early decline to rise 97.85 points to13,339.74, closing out a volatile week that remained locked on concerns about the ripple effects of China’s struggling economy.
But traders shifted their attention on Friday morning to a surprisingly bad report from the U.S. Labor Department. Employers added 142,000 workers in September, much lower than the 200,000 expected by Wall Street.
The unemployment rate stayed at 5.1 per cent because many U.S. residents stopped looking for work.
The data was immediately regarded as dismal and it sent U.S. government bond prices higher, driving down the greenback against most other major currencies. That included the loonie, which rose 0.52 of a cent (U.S.) to 75.96 cents.
Throughout the day that pessimism appeared to fade, helped by a climb in commodities stocks. “There were some people who thought the jobs number was going to create more uncertainty about timing — and the market would react negatively,” said Norman Raschkowan, a senior partner at Sage Road Advisors. “But the negative initial response didn’t last.”
The TSX energy sector gained 2.6 per cent as the November contract for benchmark crude oil advanced 80 cents to settle at $45.54 a barrel. The November contract for natural gas added two cents to $2.45 per thousand cubic feet.
December gold futures gained 2 per cent, or $22.90, to $1,136.60 an ounce.
In New York, the Dow Jones industrial average rose 200.36 points to 16,472.37, while the broader S&P 500 added 27.54 points to1,951.36 and the Nasdaq gained 80.70 points to 4,707.78.
Meanwhile, sentiment also turned positive among some investors who reasoned that the U.S. Federal Reserve was unlikely to raise interest rates any time soon as a result of the weak jobs numbers.
Among other things, Fed chair- woman Janet Yellen has said the U.S. central bank wants to ensure the employment market is on a solid footing before raising rates.
The Fed has kept its trend-setting policy rate at historical lows near zero since the Great Recession, a move that is credited with helping provide some of the liquidity that has fuelled the recovery on equity markets.
In corporate news, layoffs were taking place on both sides of the border with the National Bank of Canada saying it would cut several hundred jobs as part of a restructuring resulting from the economic slowdown.
In the U.S., Walmart laid off 450 workers at its Bentonville, Ark., headquarters as the retailer looks for ways to compete with e-commerce retailers such as Amazon.com.