TORONTO – The Toronto stock market opened higher Friday as investors’ appeared to focus on data that lifted their spirits about the U.S. economy on the last day of trading before a holiday break.
The S&P/TSX composite index gained 25.96 points to 11,902.44 just after the open, with all sectors in modestly positive territory.
The Canadian dollar was up 0.18 of a cent to 98.11 cents US as the price of oil spiked, briefly hitting US$100 a barrel before dipping slightly.
The February crude contract was up 31 cents to US$99.84 a barrel .The February gold contract slid $2.60 an ounce to US$1,608 and the March copper contract was up six cents at US$3.47 a pound.
On Wall Street, the Dow Jones industrial average was up 30.81 points at 12,200.46 and the S&P 500 was higher by 3.38 points at 1,257.38. The Nasdaq index was ahead 5.52 points to 2,604.97.
Trading volume is expected to be low Friday and into next week as many traders take a break over the Christmas and New Year period. The TSX and most global markets are closed Monday, Boxing Day, while Toronto markets will also remain closed on Tuesday.
Investor sentiment has been cheered up in recent weeks by evidence of a rebound in the U.S. – the world’s biggest economy and a crucial export market for many countries in Asia.
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But reports from the U.S. and Canada on Friday were mixed.
A Statistics Canada report showed real gross domestic product was unchanged in October after four straight monthly increases. Economists had expected a 0.1 per cent rise.
The report said that the output of goods producing industries fell 0.2 per cent due to declines in utilities, construction, mining and oil and gas extraction .The agency said these declines offset a gain in manufacturing.
“In a not so cheerful start to the holiday season, Canadian GDP was unchanged in October, versus consensus and our own expectations of a 0.1 per cent rise,” said Peter Buchanan of CIBC World Markets.
“Some observers may have been expecting a stronger (gain) for the number than the published consensus after the hearty rise in retail sales reported early in the week.”
In the U.S., the Commerce Department said consumer spending rose just 0.1 per cent in November, matching the modest October increase. Incomes also rose 0.1 per cent. That was the weakest showing since a 0.1 per cent decline in August.
“The data may suggest the consumer is not quite as healthy as many have thought,” Buchanan said.
Another Commerce Department report said orders to U.S. factories for durable goods rose 3.8 per cent in November, the biggest gain since July. However, so-called core capital goods, a measure of business investment spending, dropped for a second straight month.
Also on tap Friday, new home sales. Analysts are expecting the Commerce Department to report that in October, new home sales rose to a seasonally adjusted annual rate of 307,000. That’s less than half the 700,000 that economists say must be sold to sustain a healthy housing market, with foreclosed homes torpedoing their value.
Investors were also encouraged by an agreement in the U.S. Congress to extend a payroll tax cut for two months.
On Thursday, data showed the number of people applying for unemployment benefits dropped last week to the lowest level since April 2008, the third week in a row that applications fell. The Conference Board reported that its measure of future economic activity jumped last month, the second straight gain.
In Asia, Chinese shares were pushed higher by the announcement of government plans to begin construction of as many as eight million subsidized homes, half of which should be completed next year. Shares in cement, power, and real estate companies led gains.
Credit ratings agency Fitch said it expects growth in Asia’s developing economies will slow slightly next year but still expand by a robust 6.8 per cent, which should help bolster the region’s wealthier nations.
China’s benchmark in Shanghai gained 0.9 per cent to 2,204.78 and Hong Kong’s Hang Seng rose 1.4 per cent to 18,629.17. Japan’s financial markets were closed for a public holiday.
In Canadian corporate news, Bombardier Transportation has received an order for 90 electric multiple unit trains for use in the Frankfurt, Germany area. The contract for the Berlin-based arm of Bombardier Inc. (TSX:BBD.B) is worth about US$648 million. Shares gained 10 cents to $3.81.
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