TSX Ends Higher On Resource Stocks - Canadian Commentary

(RTTNews) - Canadian stocks ended at a three-year high Friday, driven by strength in resource stocks after commodity prices made impressive gains, after some soft jobs data triggered speculation over the state of economic recovery in the U.S. and the Federal Reserve could delay enforcing further cuts to its quantitative easing program in the near future. Combined with some disappointing Canadian unemployment data, commodities found support in the resource-heavy main index.

The Asian markets ended largely in positive territory, even as investors digested some disappointing Chinese trade data, weighing implications on the pace of the Federal Reserve's stimulus cuts. Meanwhile, the European markets ended higher amid the key monthly jobs data from the U.S.

A Labor Department report on Friday showed U.S. employment increased far lesser than expected in December, due partly to the extreme winter weather. Nonetheless, U.S. unemployment rate dropped in December, down at its lowest level since October 2008. The decline was largely due to a decrease in the size of the labor force as some unemployed people gave up looking for work.

The S&P/TSX Composite Index closed Friday at 13,747.52, up 118.11 points or 0.87 percent. The index scaled an intraday high of 13,750.66 and a low of 13,629.69.

Crude oil ended higher on some encouraging import data from China, notwithstanding the disappointing non-farm payroll jobs numbers from the U.S. that showed growth far less than anticipated.

The Energy Index rose 1.28 percent, with U.S. crude oil futures for February delivery, the most actively traded contract, gaining $1.06 or 1.2 percent to close at $92.72 a barrel Friday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) jumped 3.08 percent, while Suncor Energy Inc. (SU.TO) gathered 1.80 percent. Talisman Energy Inc. (TLM.TO) added 1.20 percent, while Encana Corp. (ECA.TO) gained 1.76 percent.

The Information Technology Index shed 0.61 percent, with smartphone maker BlackBerry Limited (BB.TO) moving up 0.95 percent.

The Diversified Metals & Mining Index gained 1.30 percent, with Teck Resources Limited (TCK.B.TO) up 0.74 percent and First Quantum Minerals Ltd. (FM.TO) up 1.31 percent.

The Capped Materials Index jumped 2.43 percent, with fertilizer giant Potash Corp. of Saskatchewan Inc. (POT.TO) adding 1.14 percent.

Gold futures ended at a four-week ended high after some disappointing non-farm payrolls jobs data out of the U.S. with the dollar trending lower against some select currencies.

The Global Gold Index surged 3.68 percent, with gold futures for February delivery, the most actively traded contract, gaining $17.50 or 1.4 percent to close at $1,246.90 an ounce Friday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) moved up 2.29 percent, while Barrick Gold Corp. (ABX.TO) jumped 3.01 percent. Yamana Gold Inc. (YRI.TO) gathered 3.44 percent.

The Financial Index edged up 0.03 percent with Bank of Montreal (BMO.TO) up 0.20 percent, Royal Bank of Canada (RY.TO) up 0.08 percent, the Bank of Nova Scotia (BNS.TO) down 0.12 percent, and Toronto-Dominion Bank (TD.TO) slipping 0.38 percent.

The Capped Industrials Index gained 0.56 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) adding 2.73 percent.

In corporate news from Canada, engineering and construction group SNC-Lavalin (SNC.TO), through its subsidiary, Itansuca Proyectos de Ingeniería S.A.S., received $87 million consulting services contract from Ecopetrol S.A. for oil transportation and logistics in Colombia.

In economic news from Canada, Statistics Canada said the economy shed 46,000 jobs, pushing the unemployment rate up by 0.3 percent to 7.2 percent in December. Employment growth averaged 8,500 per month in 2013, compared with 25,900 in 2012.

In economic news from the U.S., the Labor Department said said non-farm payroll employment edged up by 74,000 jobs in December following an upwardly revised increase of 241,000 jobs in November. Economists had been expecting employment to increase by about 200,000 jobs compared to the addition of 203,000 jobs originally reported for the previous month. Despite the weaker than expected job growth, the unemployment rate dropped to 6.7 percent in December from 7.0 percent in November.

Meanwhile, wholesale inventories in the U.S. increased in line with economist estimates in November, a report from the Commerce Department showed Friday. Wholesale inventories rose 0.5 percent in November following a revised 1.3 percent increase in October. Inventories were up 3.3 percent compared to the same month a year ago.

China's trade surplus missed forecast as exports growth eased more than expected in December, while imports beat expectations signaling robust domestic demand, data from the General Administration of Customs showed Friday.

China's exports grew 4.3 percent year-on-year in December, slower than a 5 percent expansion forecast by economists. The pace of growth decelerated sharply from November's 12.7 percent increase. Meanwhile, import growth accelerated unexpectedly last month, taking the annual growth rate to 8.3 percent. This followed a 5.3 percent gain in November and exceeded forecasts for a 5 percent rise. The trade balance showed a surplus of $25.6 billion, down from $33.8 billion in November and $32.15 billion surplus forecast.

Elsewhere, the U.K.'s industrial production remained unchanged in November compared with the previous month, the latest figures from the Office for National Statistics showed. The weaker-than-expected outcome followed two successive months of improvement. Output increased by a revised 0.3 percent in October and 0.9 percent in September. Economists had forecast a 0.4 percent increase in November.