4 Min Read
* TSX up 1.25 percent at 9,773.92
* Energy, materials sectors push higher
* Alcoa results help lift sentiment
* June employment figures due on Friday (Adds details)
By Ka Yan Ng
TORONTO, July 9 (Reuters)- Toronto's main stock index snapped a three-session skid on Thursday, finishing more than 1 percent higher as a rise in commodity prices gave a boost to the resource-heavy market.
Forecast-beating results from U.S. bellwether Alcoa (AA.N) helped lift market sentiment early in the day, with the upbeat mood spreading to key commodity prices such as gold and oil.
The aluminum giant kicked off the U.S. earnings season by reporting a third consecutive quarterly loss, but it beat estimates by a large margin due to cost cuts. [ID:nN08471164]
"That certainly started the market out quite strong. Their loss being less than expected was a big boost, which probably fed through to oil and other commodities too," said Michael Sprung, president of Sprung & Co Investment Counsel.
"People were taking that as a sign of ... things not being as bad as feared."
The S&P/TSX composite index .GSPTSE finished up 120.47 points, or 1.25 percent, at 9,773.92. Eight of its 10 main groups were higher, led by the energy and materials sectors. Consumer staples and industrials were the two groups lower.
The materials sector rose 1.9 percent, as Potash Corp of Saskatchewan Inc (POT.TO), the most influential gainer, rose 3.24 percent to C$108.80.
Economic news has been a key driver of market sentiment as investors look for new clues on the pace of the global economic recovery.
In Canada, housing starts rose in in June for a second consecutive month, up 8 percent, adding further proof that the sector was on the mend after building activity fell to a nine-year low earlier this year. [ID:nN09444036]
Market players are looking for Canada's June employment figures, due on Friday, to show a slower pace of job losses. The economy is expected to shed 35,000 jobs, while the unemployment rate is seen rising to an 11-year high at 8.7 pct from 8.4 percent. [ID:nN08393089]
"Certainly if it comes out better than expectations, that'll again put some confidence back into the market," said Sprung.
Doubts about the pace and strength of the economic recovery could see equities remaining flat or slipping lower this summer, though solid gains remain on the table over the next 18 months, said CIBC World Markets Chief Economist Avery Shenfeld.
"There's enough upside over the 18-month horizon to stay benchmark-weighted, and anything more than a 10 percent further correction would represent a good opportunity to add weight," he said.
In a report on Thursday, CIBC said Canadian households and businesses are still flush with cash and that extra capital would likely find its way into equity markets and help pull the country out of recession over the next 18 months. [ID:nN09452029]
$1=$1.16 Canadian Additional reporting by Nina Lex; editing by Rob Wilson