Oil rises and U.S. jobless claims drop
TORONTO — North American stock markets closed higher Thursday amid a rebound in commodity prices and an employment report suggesting the U.S. economic recovery remains on track.
The S&P/TSX composite index ended the day up 38.04 points at 13569.89 after falling almost 99 points on Wednesday.
New York indexes also posted gains after a U.S. Labor Department report showed that weekly applications for jobless benefits dropped 6,000 to 275,000 last week, leaving the indicator near historic lows.
The Dow Jones industrial average closed up 76.83 points at 16330.40, while the broader S&P 500 rose 10.25 points to 1952.29 and the Nasdaq index gained 39.72 points to 4796.25.
Craig Jerusalim, portfolio manager at CIBC Asset Management, said fundamentals for Canada remain strong despite the recent slide into a mild recession.
Job growth has been strong despite the economic contraction in the first half of the year, and low oil prices have a stimulating effect on consumer spending as gasoline prices fall.
“Valuations have now corrected closer to long-term averages, so it’s a good time for patient investors to increase exposure to equities,” Jerusalim said.
The loonie posted a minor advance, rising 0.13 of a U.S. cent to 75.60 cents US.
On the commodity markets, December gold was up $7.30 to $1,109.30 US an ounce, October natural gas advanced 3.2 cents to $2.683 US per thousand cubic feet and December copper added just over a penny to $2.45 US a pound.
The October contract for benchmark crude oil ended the trading day up $1.77 at $45.92 US a barrel.
3Macs analyst Robert Mark said the market is still in the middle innings when it comes to settling on a price for oil after a year-long slide and recent volatile swings.
“We’re still in a process, not just in Canada but globally, where the market’s trying to figure out where the price of oil goes to balance supply and demand,” he said.
The biggest variable for the market is the return of Iranian oil to the market after years of limited supply due to international sanctions, he said.
The recent nuclear deal that is pending before the U.S. Senate will open the spigot in an already oversupplied market, which Mark said could keep oil prices low until the end of next year.
Price-fixing charges melt away like sweet chocolate
OTTAWA — Prosecutors have abandoned charges against two companies and two top executives charged in an eight-year-old investigation into price-fixing in the chocolate confectionery business in Canada.
The federal Competition Bureau disclosed Thursday that the Public Prosecution Service of Canada had entered a stay of proceedings on Sept. 8 against distributor ITWAL Ltd. as well as its former chief executive, David Glenn Stevens.
Stays were also entered in proceedings against Mars Canada Inc. and against Sandra Martinez, a former president of confectionery for Nestlé Canada Ltd.
Proceedings against Nestlé Canada itself and its former chief executive, Robert Leonidas, are continuing, the bureau said. The charges have not been proven in court.
No reason was given for the Crown’s decision.
The charges stem from an investigation launched in July 2007 after the Competition Bureau was contacted by Cadbury Adams Canada Inc. under the bureau’s immunity program.