Markets close higher on strong jobs data
TORONTO • The Toronto stock market closed sharply higher Friday as a much stronger than expected U.S. employment report encouraged buyers while at the same time raising concerns that the U.S. Federal Reserve could be set to unwind a key stimulus program.
The S&P/TSX composite index gained 84.13 points to 13,378.33 as investors also took in Canadian jobs numbers that breezed past expectations.
The loonie was down US0.15¢ to US95.44¢ as the Canadian economy created 13,200 jobs last month, about 2,000 more than expected, while the jobless rate held steady at 6.9%.
The U. S. dollar was sharply higher after data showed that the U.S. economy cranked out 204,000 jobs, far above the approximate 120,000 reading that had been expected.
The U.S. jobless rate ticked up 0.1 of a point to 7.3%, reflecting the huge temporary layoffs that resulted from the partial U.S. government shutdown in early October.
U.S. indexes also took off as traders balanced the latest indication of an improving economy with rising concerns that the Federal Reserve will think the economy is strengthening to a point where it can start winding up its US$85-billion of monthly bond purchases. That stimulus program has supported a strong rally on markets.
“If it was a weak [employment] number, then the market would have discounted it because of the government shutdown,” said Philip Petursson, managing director of the portfolio advisory group at Manulife Asset Management.
The Dow Jones industrial average surged 167.8 points to 15,761.78, Nasdaq climbed 61.9 points to 3,919.23 and the S&P 500 index was ahead 23.46 points to 1,770.61.
The strong employment data came out a day after a better-than-expected reading on third- quarter U. S. economic growth also raised worries the Fed could start to taper as soon as the end of December.
However, investors also balanced the jobs data with another report showing declining consumer confidence.
The University of Michigan’s consumersentiment index fell to 72 in November, the lowest level in nearly two years and below expectations for a reading of 75.
On the earnings front, Air Canada posted adjusted net income of $365-million, an increase of nearly 60% compared with the same time last year. The adjusted earnings amounted to $1.29 per share, which was 26¢ per share above analyst estimates. Its shares jumped 40¢, or 7.16%, to $5.99 after hitting a fresh, 52-week high of $6.19.
Telus Corp. rose 62¢ to $36.90 as the telecommunications firm reported its adjusted profit jumped to $365-million in the third quarter, up 13% from a year earlier. On a per-share basis, Telus had 58¢ of adjusted earnings, 2¢ better than the consensus estimate.
The energy sector led advancers, ahead 1.37% while December crude on the New York Mercantile Exchange edged up US40¢ to US$94.60 a barrel.
The gold sector shook off early losses to move up about 0.65% even as bullion prices fell sharply. The December bullion contract plunged US$23.90 to US$1,284.60 an ounce.