TSX RISES ON SIGNS U.S. OUTPUT PICKING UP
TORONTO • The Toronto stock market closed higher Monday as the latest manufacturing data pointed to continued recovery in the American economy even though U. S. Thanksgiving holiday sales were mixed.
The S&P/TSX composite index climbed 24.17 points to 13,419.57, while the Canadian dollar hovered near levels not seen since June 2010. The loonie closed down US0.18 of a cent at US93.98¢.
Wall Street indexes were lower, as the Dow Jones industrials pulled back 77.64 points to 16,008.77, the Nasdaq dipped 14.63 points to 4,045.26 and the S&P 500 index fell 4.91 points to 1,800.90.
The Institute for Supply Management reported that factories increased production and hiring amid a large number of new orders last month. Its index of manufacturing activity rose in November to 57.3 from 56.4 in October and was the highest since April 2011. A reading above 50 indicates growth.
Jennifer Dowty, an associate portfolio manager with CIBC Global Asset Management, said the latest reading was “continued evidence” that the U.S. economy is steadily recovering.
Investors in the U.S. returned after a lacklustre Friday session, which was shortened due to the Thanksgiving holiday.
A survey with 4,500 shoppers conducted for the National Retail Federation found that total spending over four-day Thanksgiving holiday weekend was expected to fall for the first time since 2006. But figures for Cyber Monday forecast that 131 million people were going to shop online, up about two per cent from last year.
Ms. Dowty said U.S. investors are wary of making major moves until the latest payrolls data is released on Friday, which may provide more hints about whether the Federal Reserve will decide to cut back its US$85-billion of monthly bond purchases at its next meeting on Dec. 18. The Fed’s stimulus has kept interest rates low and helped drive equities markets higher this year. The consensus is that the U.S. central bank will not begin to taper until the new year. But positive payroll figures, new home sales and the final revision to third quarter GDP, may have the potential to change the Fed’s mind.
The Toronto Stock Exchange saw gold, materials and metals and mining all decline. The gold sector was the leading decliner, dropping 4.93% as February bullion fell $28.50 to US$1,221.90 an ounce.
Shares in the one of the world’s largest gold companies, Barrick Gold, fell more than 6%, or $1.07 to $16.54 following reports that founder Peter Munk plans to soon step aside as co-chairman. The company refused to comment Monday, except to say it will provide an update later this week.
Ms. Dowty said gold prices will likely continue to feel pressured. The U.S. economy is steadily recovering and gold, being a safe haven, is not a place that investors need to be right now,” she said.
Other commodities were mixed as the January crude contract on the New York Mercantile Exchange climbed $1.10 to US$93.82 a barrel as the sector saw an uptick of 0.62%.