DSM gets some press from CP
Energy, gold boost TSX to record close
New York rises as jobs data disappoints
Jan. 6, 2006. 06:16 PM
CANADIAN PRESS
Energy and gold stocks pushed the Toronto stock market up by more than 100 points to another record breaking close today despite a December employment report that missed expectations.
In New York, indexes racked up solid gains as a weak employment report firmed expectations that the long string of rate increases by the U.S. Federal Reserve is coming to an end.
“Lots of optimism out there,” said Patricia Croft, chief economist at Phillips, Hager and North.
“It’s all about oil and gold and the Federal Reserve so you’ve got all that combination coming together today — what a way to start the year.”
Toronto’s S&P/TSX composite index surged 112.72 points to 11,620.4, its fourth consecutive record-busting close since breezing past the 11,388.82 level from Sept. 1, 2000 on Tuesday. The index was up 348.14 points or three per cent on the week.
The gold sector was the biggest percentage gainer, ahead three per cent as the February price for bullion on the New York Mercantile Exchange rose $13.40 to $541.20 US an ounce, the highest close since March, 1981.
The spot price moved up $13.40 to $539.70 US.
Bema Gold Corp. was one of the big winners, rising 23 cents to $3.96 and Desert Sun Mining jumped 62 cents or 19.2 per cent to $3.85.
Analysts thought the most recent spike in gold was related to a weakening in the U.S. dollar sparked earlier in the week as the release of minutes from the U.S. Federal Reserve pointed to an end to the interest-rate tightening cycle.
Statistics Canada said an increase of 36,000 full-time jobs was offset by a loss of 38,000 part-time positions. Economists had generally expected the economy to add 20,000 jobs.
Canada’s unemployment rate edged up to 6.5 per cent in December as more people sought work, compared with a 30-year low of 6.4 per cent in November.
The TSX Venture Exchange moved up 43.46 points to 2,307.4.
Meanwhile, the Canadian dollar lost more ground, down 0.13 of a cent to 85.82 cents US.
On Thursday, the loonie had tumbled 1.26 cents to 85.95 cents US. Analysts said the drop was triggered by concerns that the Bank of Canada won’t raise interest rates as much as expected this year.
In New York, the Dow industrial average rose 77.16 points to a four-and-a-half-year high of 10,959.31, giving the blue chip index a gain of 241.81 points or 2.26 per cent this week.
The tech-laden Nasdaq composite moved 28.75 points higher to 2,305.62 to net 100.28 points or 4.55 per cent this week.
The Standard & Poor’s 500 index was up 11.97 points at 1,285.45 as U.S. job growth slowed in December after a big hiring spurt in November.
U.S. job creation for the month came in at 108,000, much lower than the 200,000 jobs that had been expected.
But traders took the job news as further reassurance about the future pace of rate hikes.
November job gains were revised upward from 215,000 to 305,000 and the unemployment rate dipped from five per cent in November to 4.9 per cent last month as some people left the labour market.
The TSX energy sector gained 1.85 per cent as oil prices rose and natural gas regained ground after a mild start to winter in the United States had pushed prices to a 461/27-month low. Light sweet crude for February delivery rose $1.42 to $64.21 US a barrel on the New York Mercantile Exchange. Natural gas futures rose 13 cents to $9.63 US per 1,000 cubic feet, retracing territory lost a day earlier as mild U.S. weather tempered traders’ supply concerns and the U.S. Energy Department released data that showed a surprising increase in natural gas inventories last week.
EnCana Corp. ran up 74 cents to $53.42 and Petro Canada rose 95 cents to $48.95.
Tech stocks were also strong with the TSX IT sector ahead 2.9 per cent with Research in Motion Ltd. ahead $3.56 to $84.16 and Nortel Networks Corp. 11 cents ahead to $3.96.
On the TSX, advances beat declines 987 to 527 with 225 unchanged.