CANADA STOCKS-TSX hits 2-1/2 year high as jobs data lifts commodities

Fri Jan 10, 2014 4:49pm EST
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* TSX rises 118.11 points, or 0.87 percent, to 13,747.52
    * Nine of the 10 main index sectors advance
    * Saputo up after company extends offer for Warrnambool
    * CGI Group drops after losing Obamacare contract

    By John Tilak
    TORONTO, Jan 10 (Reuters) - Canada's main stock index
advanced to its highest in about 2-1/2 years on Friday as
disappointing North American jobs data  proved to be a boon to
commodity prices, helping drive up shares of natural resource
    Prices of gold, oil and other commodities gained on
speculation that soft U.S. employment figures for December would
push the U.S. Federal Reserve to slow the wind-down of its
monetary stimulus program.  
    It was the benchmark index's biggest single-day percentage
jump in more than three weeks and its fourth straight daily
    After trailing its U.S. peers in 2013, the Canadian index
appeared to be gathering momentum this week. It outperformed the
S&P 500 on Friday. 
    "We'll probably keep pace with the United States in 2014,"
said Philip Petursson, managing director, portfolio advisory
group, at Manulife Asset Management. "Whether we'll outpace the
U.S. is the real question."
    "Earnings will drive the market this year," he added. "The
prospects (for Canadian companies) are looking vastly improved
over 2013." 
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 118.11 points, or 0.87 percent, at
13,747.52, after rising as high as 13,750.66, its strongest
level since mid-2011.
    The index ended the week 1.5 percent higher. 
    Government data showed the Canadian economy lost 45,900 jobs
last month, resulting in a higher unemployment rate and raising
expectations that the Bank of Canada might trim interest rates.
    The United States recorded the weakest jobs growth in about
three years in December, with some indication that severe cold
weather had had an impact. 
    "It's a double whammy," said Shailesh Kshatriya, associate
director for client investment strategies at Russell Investments
    "It was a horrible number. There's no way to sugarcoat it,"
he said of the Canadian jobs report. The data, coupled with
sluggish trade numbers and high household indebtedness, points
to a slight weakening of the Canadian economy, he added.
    Nine of the 10 main sectors on the index were higher on
    With the bullion price up 1.3 percent, gold-mining shares
jumped 3.7 percent. Goldcorp Inc added 4 percent to
$25.29, and Barrick Gold Corp advanced 3 percent to
    Shares of energy producers were up 1.3 percent, reflecting a
1.2 percent rise in the price of U.S. crude oil. Canadian
Natural Resources Ltd rose 3.1 percent to C$36.19, and
had the biggest positive influence on the index. Suncor Energy
Inc gained 1.8 percent to C$37.96.
    In company news, Saputo Inc extended its offer for
Australia's Warrnambool Cheese and Butter Factory Holdings Co
. Saputo's stock firmed 1.7 percent to C$49.85.
    Shares of IT services provider CGI Group Inc 
dropped 2.5 percent to C$34.37 after news emerged that its
contract with the U.S. government for the Obamacare website
HealthCare.Gov would end next month.