Markets close higher on solid jobs data

By Ma lcolM Mo rrison North American stock markets closed higher Friday amid much better than expected job creation data in Canada and the United States. But gains were limited on another day of worries about the U.S. plunging over the fiscal cliff.

The S&P/TSX composite index added 8.64 points to 12,159.77 while the TSX Venture Exchange gave back 0.64 of a point to 1,186.06.

Shares in energy giant tumbled in a volatile final hour of trading ahead of an expected announcement by the federal government after the close on dealing with foreign takeovers of domestic resource firms. Nexen fell $1.58 or 6.35% to $23.29 on heavy volume of 3.6 million shares. Shares also fell on speculation Prime Minister Stephen Harper would also announce a decision on whether Chinese state-owned China National Offshore Oil Company can go ahead with its $15.1-billion friendly bid for Nexen.

Statistics Canada reported the economy added 59,000 jobs last month, while the jobless rate dropped by 0.2 of a point to 7.2%.

Economists had expected a smaller increase of about 10,000 jobs, following a minimal 1,800 job gain in October.

The Canadian dollar rose US0.01¢ to US100.91¢.

The news was equally surprising in the U.S., where economists had expected a lacklustre report with job creation impacted by superstorm Sandy.

But the U.S. Labor Department said the economy cranked out 146,000 jobs in November while the jobless rate decreased 0.2 of a point to 7.7%. On a less positive note, job gains for the previous two months were ratcheted down by 49,000.

Traders later took in other data that showed “fiscal cliff ” worries are affecting consumer confidence. The fiscal cliff is the name for a situation that would arrive at the end of December if substantial tax increases and spending cuts are triggered.

The Dow Jones industrials ran ahead 81.09 points to 13,155.13 after the widelywatched University of Michigan’s measure of consumer confidence fell to a fourmonth low of 74.5 in December, from 82.7.

“I think the change in sentiment is all sentiment and it’s not based on fundamentals at all,” said Philip Petursson, director of institutional equities at Manulife Asset Management. “I think what we’re seeing as far as the University of Michigan is concerned is just a reaction to all the negative press that has been surrounding the fiscal cliff and I think that weighs on confidence of Americans.”

The Nasdaq dipped 11.23 points to 2,978.04 and the S&P 500 index edged 4.13 points higher to 1,418.07.