Toronto stocks seen higher amid jobs data cheer
TORONTO Feb 8 (Reuters) - The Toronto Stock Exchange's main index was set to rise on Friday, spurred by a red-hot Canadian jobs report, better-than-expected housing starts, and bullish gold and oil prices.
The economic data, which had economists talking in hyperbole, makes a convincing case that Canada's economy remains strong despite a slowdown in the United States, its biggest trading partner.
TSX financial stocks were seen benefiting most from the jobs report, while materials and energy firms were seen getting a boost from a jump in the prices of spot gold and crude oil futures.
However U.S. stock futures fell after a Federal Reserve official said a U.S. recession may not be avoidable, and any big move in U.S. stocks could drag down the benchmark Canadian index.
But early headlines were dominated by data that showed Canada added 46,400 full-time positions last month, pushing the unemployment rate to a 33-year low. For details, see: [nN07421141]
"It was quite the surprise. We turned the report upside down looking for some kind of negative, and there's none," said Carlos Leitao, chief economist at Laurentian Bank Securities, in Montreal.
"Because employment is a lagging indicator, what this tells us is that the Canadian economy was still in reasonably good shape as we entered 2008, and that it is not as fragile as the U.S. economy appears to be."
Leitao noted that Canada isn't immune to a U.S. slowdown, and suggested the Bank of Canada would be less inclined to aggressively cut interest rates in the first half of this year.
A strong economy usually attracts foreign demand for equities, so the TSX was seen adding to the 0.45-percent gain it logged in the previous session. Continued...