TSX TopS 13,000 for firST Time Since 2011

TORONTO • The Toronto stock market closed higher Thursday to crack the 13,000 level for the first time since late July 2011.

The S&P/TSX composite index was up 79.15 points to 13,036.36, led by the gold sector. Bullion prices were boosted as traders reckoned that the economic damage resulting from the partial U.S. government shutdown will further delay any plans by the Federal Reserve to cut back on key stimulus.

Most sectors were higher amid relief that U.S. lawmakers have headed off a potential default, but that feeling was muted by the fact that Republicans and Democrats will be locking horns again over the debt issue in just a few months.

It’s been a long, hard slog for the TSX which steadily lost ground from the summer of 2011, falling as low as 11,513 as the European debt crisis worsened, Chinese growth slowed and commodity prices fell.

“In a word, it’s commodities,” said Doug Porter, chief economist at BMO Capital Markets. “Commodity prices are much lower than they were in the spring of 2011 and the Canadian equity market has been swimming upstream against that. But a number of commodities look to have stabilized finally and meanwhile the rest of the market is starting to perform well.”

Thursday’s advance leaves the TSX ahead up 4.84% year to date while the Dow industrials has charged ahead 17%. It also leaves the Toronto market well off the record high of 15,073 reached in June 2008, about two months before the collapse of Lehman Bros. sparked a financial crash.

The Canadian dollar was up 0.38 of a cent to US97.15¢, while the U.S. dollar weakened after the Senate and House of Representatives passed a measure Wednesday night that reopens the government through Jan. 15 and permits the U.S. Treasury to borrow normally through Feb. 7 or perhaps a month longer.

“I think the peripheral risk here isn’t as much the lost output from the government shutdown,” said Kash Pashootan, vicepresident and portfolio manager at First Avenue Advisory in Ottawa, a Raymond James company. “It’s the longer-ranging impact on overall confidence because it’s difficult to have investors want to invest when they’re not sure which way [the] government is going to go in the next month or the month after.”

U.S. indexes were mainly higher but markets were also pressured by weak earnings reports from IBM and Goldman Sachs and the Dow Jones industrials slipped 2.18 points to 15,371.65. The Nasdaq gained 23.72 points to 3863.15. The S&P 500 index added 11.61 points to close at a fresh, record high of 1733.15.

The gold sector ran ahead about 4.7%. Goldcorp improved by 85¢ to $25.26, while Barrick Gold climbed 83¢ to $19.06. The base metals component rose 1.13% even as December copper slipped one cent to US$3.30 a pound. Taseko Mines ran up 9¢ to $2.27. Financials were also supportive as Scotiabank climbed 61¢ to $60.81.

Tech stocks led TSX decliners, down over 1% with CGI Group down $1.25 to $37.16. Shares in BlackBerry were 2¢ higher to $8.44 following a report that Chinese computer maker Lenovo is looking at buying the Canadian tech company.