Resource stocks propel TSX forward
Resource stocks gave a major push to the Toronto stock market Friday amid mixed North American jobs reports, with energy and mining stocks benefiting from commodity prices that ran ahead as the U.S. dollar weakened following a disappointing read on American job creation.
The S&P/TSX composite index jumped 127.45 points to 14,690.83. The weaker American currency and a strong Canadian employment report sent the loonie up 0.72 of a cent (U.S.) to 88.24 cents.
The Canadian economy created 43,100 jobs last month. Economists had forecast that the country would actually shed about 5,000 jobs after adding 74,000 in September. The Ca- nadian unemployment rate dropped sharply from 6.8 per cent to 6.5 per cent, the lowest since November 2008.
New York markets were generally lacklustre after the U.S. economy generated 215,000 positions in October, lower than the 235,000 economists had expected. However, the U.S. jobless rate also fell, dropping to 5.8 from 5.9 per cent. Also, U.S. job creation estimates for the past two months were revised upward by 31,000. New York’s Dow industrials climbed 19.46 points to 17,573.93, the Nasdaq declined 5.94 points to 4,632.53 and the S&P 500 index was up 0.71 of a point to 2,031.92.
Some analysts were curious about the market reaction, since the data showed that employers have now added at least 200,000 jobs for nine straight months — the longest such stretch since 1995. “It’s an example of shoot first and ask questions later,” said Craig Jerusalim, portfolio manager at CIBC Asset Management.
“It wasn’t all that bad. There’s still over 200,000 jobs (created), the participation rate picked up, the unemployment rate came down nicely, people are going back to work. Why? Because the economy is starting to gain some proper momentum and fundamental strength in my view.” In other corporate developments, Bloomberg reported that Canadian Pacific Railway could be interested in going after Norfolk Southern, the second-largest railway in the eastern U.S. CP made a pitch to U.S. carrier CSX in October but talks didn’t result in a deal. Canadian Pacific director Bill Ackman, founder of CP shareholder Pershing Square Capital, said CSX is not the only potential merger partner. “I think the risk with CSX is we merge with” a rival to the Jacksonville, Fla.,based carrier. CP fell $1.16 to $233.85 while Norfolk Southern gained 1.9 per cent. The TSX finished ahead 78 points or 0.5 per cent at the end of a volatile week in which energy shares were whipsawed as a move by Saudi Arabia to cut prices to its American customers pushed oil prices to threeyear lows. The Dow gained 184 points or 1.05 per cent on the week.