TSX higher amid rising commodities, U.S. indexes up on positive jobs data

TORONTO – The Toronto stock market closed higher Thursday as energy and many mining stocks advanced alongside rising commodity prices.

The S&P/TSX composite index gained 55.80 points to 12,799.91, as the main index clawed back a chunk of Wednesday’s 134-point tumble. The TSX Venture Exchange slipped 2.75 points to 1,112.61.

The Canadian dollar was up 0.48 of a cent at 97.82 cents US.

U.S. indexes were also higher as the Dow industrials winning streak extended to a 10th straight session amid positive employment news that raised hopes the strong rally in place so far this year has a ways to go yet.

The Dow industrials ran up 83.86 points to 14,539.14 — the eighth record high close in a row — as fewer Americans sought unemployment aid last week, reducing the average number of weekly applications last month to a five-year low.

The U.S. Labour Department says applications fell 10,000 to a seasonally adjusted 332,000. That pushed the four-week average to 346,750, the lowest since March 2008, just several months after the Great Recession began.

The Nasdaq was up 13.81 points to 3,258.93 while the S&P 500 index rose 8.71 points to 1,563.23.

Traders also focused on the S&P 500, which is creeping towards its previous closing high of 1,565.

The strong performance in March has carried on a rally that started early in the new year after American politicians stopped the economy from going over a so-called fiscal cliff. The higher returns have since been supported by assurances that the U.S. Federal Reserve will continue with its stimulus programs, strong fourth-quarter earnings, steady employment gains and an improving housing sector.

That has left the Dow industrials up a solid 10 per cent in just 2 1/2 months as investors from around the world put more and more money into the U.S. markets.

“There is an inflow of capital to the U.S. market from almost everywhere. You see it coming out of gold, you see it coming out of cash, bonds, the TSX and other indexes,” said Kash Pashootan, vice-president and portfolio manager at Raymond James in Ottawa.

He thinks the rally still has momentum and that belief is backed by continuing signs of a stronger economy.

As for worries that the rally is looking stretched, Pashootan observed that “the market will be volatile and it almost doesn’t matter what the reasons are, as things go up it will look for a reason to retrace.”

“But those corrections will be buying opportunities. So on the investment strategy, my view is having a little bit of cash on the sidelines to take advantage of those dips.”

The April crude contract on the New York Mercantile Exchange shed early losses following the release of the jobless claims data and added 51 cents to US$93.03 a barrel. The energy sector rose 1.4 per cent and Canadian Natural Resources (TSX:CNQ) climbed $1.26 to C$33.25.

Pacific Rubiales Energy Corp. (TSX:PRE) shares were down $1.39 or 5.6 per cent to $23.40 after the natural gas and crude oil producer announced a $23.8 million quarterly net loss equal to eight cents per diluted share. That compared with a year-earlier profit of US$80.8 million.

Revenue rose slightly to US$1.05 billion from US$1.01 billion amid an unfavourable arbitration decision. The company might have to divert 10 per cent of its share of future production from a Colombian oil and gas field for 20 months to compensate Ecopetrol, a major Colombian energy company.

The gold sector was also ahead as April bullion gained $2.30 to US$1,590.70 an ounce. Goldcorp Inc. (TSX:G) added seven cents to C$33.14.

Telecoms were positive as Telus Corp. (TSX:T) gained 33 cents to $68.74. The Vancouver-based telecom announced a two-for-one split of its common shares, effective April 16 and subject to regulatory approval.

The base metals sector was down 0.2 per cent even as May copper gained a cent to US$3.54 a pound. Teck Resources (TSX:TCK.B) declined 24 cents to C$30.09 while First Quantum Minerals (TSX:FM) gained 67 cents to $21.83.

Utilities led decliners with Atlantic Power (TSX:ATP) down 39 cents to $5.52.

Elsewhere on the corporate front, Pierre Karl Peladeau is stepping aside as president and chief executive of Quebecor Inc. (TSX:QBR.B) and Quebecor Media Inc. but will remain with the companies to oversee corporate strategy. The new president and CEO of the Quebec-based media giant will be Robert Depatie, who has been president and CEO of Quebecor’s Videotron cable and telecom service since 2003.

Quebecor shares fell $2.41 to $43.66 as the company also announced that its net income plunged to $9.2 million or 15 cents per share in the latest quarter, a decline from $85.4 million or $1.34 per share from a year earlier — mostly due to non-cash items required under standard accounting.

Integrated vacation tour operator Transat A.T. Inc. (TSX:TRZ.B) posted a quarterly net loss of $15.1 million or 39 cents per share on a diluted basis. That almost halved its net loss of $29.5 million a year ago. Revenue slid 2.8 per cent to $805.7 million.

Meanwhile, the company reported an adjusted after-tax loss of $21.6 million or 56 cents per share in the quarter and its shares slipped 51 cents to $5.75.