Markets Advance on U.S. jobs data
TORONTO • North American stock markets closed sharply higher Friday as a stronger than expected U.S. employment report trumped worries that the Federal Reserve might start to cut back on stimulus sooner than expected.
The S&P/TSX composite index ran up 80.32 points to 13,280.72 after the U.S. Labor Department reported that 203,000 jobs were created during November, on top of a revised 200,000 in October, while the jobless rate fell 0.3 of a point to 7%. Economists had expected a gain of around 180,000.
The Dow Jones industrials surged 198.69 points to 16,020.2, the Nasdaq rose 29.35 points to 4062.52, while the S&P 500 index climbed 20.06 points to 1805.09.
“The yin and the yang of it is, on the one hand, great numbers, great reports, but on the other hand, is this bringing on the day of tapering sooner rather than later?” said John Stephenson, a portfolio manager at First Asset Funds Inc. “So, for today, it’s a happy day. Monday might be a different story.”
The Canadian dollar slipped 0.14 of a cent to US93.84¢ amid strong Canadian job numbers. Statistics Canada reported that the economy added 21,600 jobs during November, almost double the number that had been expected. The jobless rate held steady at 6.9%.
The loonie had initially dropped as low as US93.39¢ as the greenback advanced and bond yields rose after the release of the U.S. job numbers.
The financial sector led advancers, as traders also took in the final earnings report from the big banks. Scotiabank posted quar- terly net income of $1.7-billion, up 12% from a year ago. Scotiabank also says it earned $1.30 per share of net income in the fourth quarter, up from $1.18 a year earlier. Core earnings per share came in at $1.31 a share, a penny short of expectations. The shares erased early gains to rise 66¢ to $63.98.
Other bank stocks turned higher after registering losses during the week as traders absorbed a mixed bag of earnings from a sector that had soared as high as 22% year to date. Bank of Montreal rose $1.22 to $70.47 and Royal Bank was up 88¢ to $69.05.
The industrials sector also advanced and Canadian Pacific Railway improved by $2.92 to $164.26 and Canadian National Railways gained 78¢ to $60.21.
Base metal stocks ran up while March copper gained US2¢ to US$3.25. First Quantum Minerals climbed 18¢ to $17.20.
The gold sector finished the session flat while bullion lost $2.90 to US$1,230.30 an ounce. Goldcorp climbed 30¢ to $22.44.
The TSX finished the session off the highs of the day as energy stocks moved further into the negative column.
The energy sector was down as the January crude contract on the New York Mercantile Exchange gained US27¢ to US$97.65 a barrel. Suncor Energy fell 54¢ to $35.73.
The TSX and the Dow both finished last week in the red, with the Toronto market off 0.86% and the Dow down 0.41%. But gains from earlier in the autumn are still largely intact with the TSX up 7% year to date and the Dow ahead 22%.