TORONTO - The Toronto stock market registered a solid advance Friday despite employment reports for December from Canada and particularly the United States that widely missed expectations.
The S&P/TSX composite index moved up 66.32 points to 11,953.83. The main index ran up 1.76 per cent this week with investors satisfied that the general trend shows economic conditions are improving. They're also hopeful that the weak data means the U.S. Federal Reserve will be in no rush to raise interest rates.
New York markets also had a muted reaction to the U.S. Labour Department report showing that the American economy lost another 85,000 jobs last month. Economists had expected a flat showing, or perhaps a slight job loss of around 1,000. A sharp drop in the labour force, a sign more of the jobless are giving up on their search for work, kept the U.S. unemployment rate unchanged at 10 per cent.
Revisions to the previous two months' data showed the U.S. economy actually generated 4,000 jobs in November, the first gain in nearly two years.
"If what we had seen was a surprising amount of job growth, then you might have actually seen the market sell off because then people would say, 'Well, maybe the Fed is going to change and be forced to change its policy sooner,"' said Norman Raschkowan, chief investment officer at Mackenzie Financial Corp., adding that he was encouraged by a positive showing in hours worked data in the Canadian and U.S. reports.
"Overall, this quarter, it's not that bad and it's showing a steady improvement. The fourth quarter is turning out to be better than the third and the third was better than the second and you're seeing this sort of gradual steady improvement in conditions."
The Canadian dollar ticked 0.38 of a cent higher to 97 cents US as Statistics Canada reported that the Canadian economy shed 2,600 jobs in December, well below economists' expectations that 20,000 jobs would be created.
Economists pointed out that December's performance followed a huge gain of 79,000 jobs in November.
Still, BMO Capital Markets deputy chief economist Doug Porter says the jobs report shows that "the economic recovery will be uneven, with overall growth likely to pale compared with past recoveries."
On the corporate front, investors took in news that Canwest Global Communications (TSXV:CGS) is putting its newspaper operations and related online operations under bankruptcy protection and up for sale. Its shares traded half a cent lower to 6.5 cents on the TSX Venture Exchange.
The base metals sector led advancers, up 3.21 per cent with March copper off three cents at US$3.41 a pound. Teck Resources (TSX:TCK.B) advanced $1.20 to $41.79 while First Quantum Minerals (TSX:FM) climbed $5.40 to $91.95.
The TSX industrials sector ran up 1.77 per cent with Canadian National Railway (TSX:CNR) ahead $1.65 to $58.53 and Bombardier Inc. (TSX:BBD.B) up 13 cents to $5.18.
The consumer staples sector moved ahead as higher sales helped Quebec-based pharmacy chain Jean Coutu Group Inc. (TSX:PJC.A) to a profit of $44.6-million or 19 cents a share in its latest quarter. That's a vast improvement from the year-earlier period when Jean Coutu lost $399.2-million, or $1.66 per share, largely because of writedowns of its investment in the Rite-Aid pharmacy chain in the United States. Jean Coutu shares advanced 32 cents to $10.05.
The TSX energy sector was ahead 0.37 per cent as the February crude contract on the New York Mercantile Exchange gained nine cents to US$82.75 a barrel.
The TSX gold sector was ahead one per cent as the February bullion contract on the Nymex climbed $5.20 to US$1,138.90 an ounce. Goldcorp Inc. (TSX:G) was up 59 cents to $43.80.
The TSX Venture Exchange was 13.57 points higher to 1,605.10.
The Dow Jones industrials gained 11.33 points to 10,618.19 for a gain of 1.8 per cent this week.
The Nasdaq composite index was ahead 17.12 points to 2,317.17 while the S&P index rose 3.29 points to 1,144.98.
Investors also took in news that UPS -- the world's largest package delivery company -- will cut 1,800 management and administrative positions to streamline its U.S. package segment.
UPS also said it expected to top its previously announced earnings prediction of 58 to 65 cents a share for the fourth-quarter of 2009. The company now says its hopes to see profits of between 73 and 75 cents a share when it reports Q4 earnings Feb. 2. It shares ran up $2.76 to US$60.17.
In other corporate news, shares in DragonWave Inc. (TSX:DWI), an Ottawa-based global supplier of packet microwave radio systems, ran up $1.34 or 10.6 per cent to $13.96 after the firm said it earned over $12 million in net profit in its fiscal 2010 third quarter. Revenues more than quadrupled on a surge of business from North American customers.
