TORONTO – North American markets began the week with big advances amid continued optimism among traders that sluggish U.S. employment figures make it unlikely that the U.S. Federal Reserve will raise interests rates any time soon.
In Toronto, the S&P/TSX composite finished the day 212.5 points, or 1.59 per cent higher, to 13,552.2, bolstered by increases in oil and base metals prices.
In New York, the Dow Jones industrial average soared 304.1 points (1.85 per cent) to 16,776.49, adding to a 200-point gain Friday in wake of the disappointing jobs report from the U.S. Labor Department. The broader S&P 500 index advanced 35.6 points (1.83 per cent) to 1,986.99 and the Nasdaq gained 73.49 points (1.56 per cent) to 4,781.26.
The commodity-sensitive Canadian dollar also moved higher, up 0.43 or a U.S. cent to 76.39 cents US.
Markets were also responding to news that the Trans-Pacific Partnership — a long-awaited free trade pact between Canada, the U.S. and a host of Asian Pacific countries — has been reached.
MORE: What Canadians should know about the TPP deal
Bad news as good news
Last week’s U.S. jobs report is seen as positive by investors since ultra-low interest rates since the 2008 financial crisis have helped push up stock prices.
Fed chairwoman Janet Yellen has cited strength in the U.S. jobs market as an important factor as the U.S. central bank determines when to increase interest rates.
The Fed next meets at the end of this month and again in late December.
“The absolutely weak non-farm payrolls data complicated the Fed’s resolve to raise rates this year,” IG analyst Bernard Aw wrote in a report. “The soft jobs numbers in the last two months certainly make (an) October rate (increase) an even more unlikely endeavour.”
In corporate news, Suncor Energy is making a hostile bid to take over Canadian Oil Sands Ltd., the largest partner in the massive Syncrude mine.
Suncor is offering $4.3 billion in its own stock and would take on about $2.3 billion in COS debt, bringing the total price tag to $6.6 billion. On the Toronto Stock Exchange, Suncor shares were down 80 cents of 2.26 per cent at $34.56 at midafternoon, while COS stock jumped $3.03 or almost 50 per cent to $9.22.
MORE: Suncor launches hostile bid for Canadian Oil Sands
On the commodity markets, the November contract for benchmark crude oil was up 69 cents at US$46.23 a barrel, while November natural gas was unchanged at US$2.45 per thousand cubic feet. December was down 40 cents at US$1.136.20 an ounce, while December copper gained three cents to US$2.35 a pound.
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