TSX Ends Higher After U.S. Jobs Data -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher for a second straight session Friday, tracking rising global equity markets, amid some encouraging jobs data from the U.S. where employment levels dropped to its lowest in about seven years.

Markets in the U.S. ended well into positive territory with all major averages posted strong gains, near their highs for the session. The Wall Street rally stems from the the Labor Department's highly anticipated monthly jobs report from April, which came in better than expected.

The positive sentiment on Wall Street also comes amid a rally by European stocks, which moved higher on news the Conservatives won a surprise victory in the general elections in the U.K.

The U.S. jobs data was seen as solid but not strong enough to put a June interest rate hike by the Federal Reserve back on the table.

A Labor Department report on Friday showed unemployment rate in the U.S. dropped to its lowest level in almost seven years, with employment in the U.S. increasing roughly in line with economists' estimates in April. The unemployment rate at 5.4 percent was at its lowest since hitting a matching rate in May 2008.

The report said non-farm payroll employment increased by 223,000 jobs in April compared to economist estimates for an increase of about 220,000 jobs. It is now expected the strong jobs report will push the Federal Reserve to raise interest rates in either July or September.

The unemployment rate dropped to 5.4% from 5.5%, marking the lowest level since May 2008. It is now expected the strong jobs report will push the Federal Reserve to raise interest rates in either July or September.

The benchmark S&P/TSX Composite Index closed Friday at 15,170.02, up 81.20 points or 0.54 percent. The index scaled an intraday high of 15,200.22 and a low of 15,099.22.

On Thursday, the index closed down 64.93 points or 0.43 percent, at 15,088.82, with an intraday high of 15,103.53 and a low of 14,934.30.

The Diversified Metals & Mining Index dropped 0.33 percent, as First Quantum Minerals Ltd. (FM.TO) shed1.30 percent and Lundin Mining (LUN.TO) dipped 0.63 percent. Teck Resources Limited (TCK.B.TO) gained 0.22 percent.

Gold futures settled higher on Friday, on some positive jobs data from the U.S. with unemployment rate dropping to a 7-year low. Investors now expect the Federal Reserve to raise interest rates in either July or September.

The Gold Index gained 0.59 percent, with gold for June delivery adding $6.70 or 0.6 percent to settle at $1,188.90 an ounce on the New York Mercantile Exchange Friday.

Among gold stocks, Goldcorp Inc. (G.TO) added 2.95 percent, Barrick Gold Corp. (ABX.TO) inched up 0.07 percent, and Yamana Gold Inc. (YRI.TO) gathered 0.83 percent.

Eldorado Gold Corp. (ELD.TO) moved up 0.83 percent, while Agnico Eagle Mines Limited (AEM.TO) fell 0.38 percent.

The Capped Materials Index gained 0.16 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) dropping 1.44 percent, while Agrium Inc. (AGU.TO) moved up 2.24 percent.

U.S. crude oil ended higher with investors mulling the positive inventory data and the positive jobs data from the U.S., raising demand growth prospects for oil.

The Energy Index climbed 1.44 percent, with U.S. crude oil futures for June delivery, the most actively traded contract, gaining $0.45 or 0.8 percent, to settle at $59.39 a barrel on the New York Mercantile Exchange Friday.

Among energy stocks, Suncor Energy Inc. (SU.TO) moved up1.04 percent, while Crescent Point Energy Corp. (CPG.TO) climbed 3.34 percent. Cenovus Energy Inc. (CVE.TO) gained 1.30 percent, while Canadian Oil Sands Limited (COS.TO) inched up 0.08 percent.

Pacific Rubiales Energy Corp. (PRE.TO) edged up 0.16 percent, while Canadian Natural Resources Limited (CNQ.TO) inched up 0.13 percent.

The heavyweight Financial Index gained 0.11 percent, as Bank of Nova Scotia (BNS.TO) inched up 0.03 percent, while Toronto-Dominion Bank (TD.TO) added 0.58 percent. Royal Bank of Canada (RY.TO) gathered 0.44 percent, and Canadian Imperial Bank of Commerce (CM.TO) moved up 0.37 percent.

National Bank of Canada (NA.TO) added 0.39 percent, while Bank of Montreal (BMO.TO) added 0.53 percent.

The Capped Health Care Index added 1.22 percent as Valeant Pharmaceuticals International Inc. (VRX.TO) gained 0.91 percent, Concordia Healthcare Corp. (CXR.TO) jumped 2.97 percent, and Catamaran Corp. (CCT.TO) slipped 0.52 percent.

The Capped Industrials Index gained 0.61 percent, as Air Canada gathered 0.17 percent, Canadian Pacific Railway Limited (CP.TO) shed 0.46 percent, Finning International Inc. (FTT.TO) moved up 1.72 percent, and Canadian National Railway (CNR.TO) added 0.42 percent.

Plane and train maker Bombardier Inc. (BBD_B.TO, BBD_A.TO) gathered 3.54 percent after warning that it's planning more cost-cutting and will likely cut jobs in Toronto and Montreal factories. On Thursday, the company announced plans for an initial public offering of its rail division, but will retain its majority stake.

The Information Technology Index moved up 0.48 percent, as Descartes Systems Group Inc. (DSG.TO) gained 0.72 percent, and Sierra Wireless, Inc. (SW.TO) sharply down 7.88 percent. BlackBerry Inc. (BB.TO) gathered 1.10 percent.

The Capped Telecommunication Index dropped 1.64 percent, as Rogers Communications Inc. (RCI.B.TO) fell 0.96 percent after having indicated Thursday that 110 people will lose their jobs at Rogers Media.

TELUS Corp. (T.TO) dropped 1.94 percent, while BCE Inc. (BCE.TO) gathered 0.24 percent.

On the economic front, a Labor Department said non-farm payroll employment increased by 223,000 jobs in April compared to economist estimates for an increase of about 220,000 jobs.

The overall job growth helped push the unemployment rate down to 5.4 percent in April from 5.5 percent in March, in line with economist estimates, the lowest level since May 2008. However, the Labor Department also said the increase in employment in March was downwardly revised to 85,000 jobs from the previously reported 126,000 jobs.

Wholesale inventories in the U.S. rose less than expected in March, a report from the Commerce Department showed Friday. Wholesale inventories inched up 0.1 percent in March after rising by a downwardly revised 0.2 percent in February. Economists expected wholesale inventories to climb by 0.3 percent, matching the increase originally reported for the previous month.

China's exports logged an unexpected drop on weak demand in April, with imports also declining more than expected adding to hopes of more economic stimulus. Exports fell 6.2 percent in April from last year in yuan terms, data from the General Administration of Customs showed Friday. Economists had forecast a 0.9 percent increase for April.

China's imports registered a double-digit decrease of 16.1 percent annually, sharper than an expectation for a 8.4 percent drop. Consequently, the trade surplus came in at CNY 210.2 billion, below the consensus forecast of CNY 173.8 billion.

In U.S. dollar terms, exports were down 6.4 percent from a year ago, slower than March's 15 percent decline. Exports were forecast to grow 1.6 percent. Imports declined 16.2 percent versus 12.7 percent fall in March. As a result, China's trade surplus increased to $34.1 billion in April from $3.1 billion in March. The surplus was expected to rise to $39.6 billion.

Germany's exports and imports growth exceeded expectations in March, with exports rising 1.2 percent month-on-month in March, much faster than the 0.4 percent rise forecast by economists. Nonetheless, this was slightly slower than the 1.4 percent rise seen in February.

German imports advanced 2.4 percent, while growth was expected to ease to 0.1 percent from 1.3 percent seen in February. As growth in imports outpaced export growth, the seasonally adjusted trade surplus dropped to EUR 19.3 billion from EUR 20 billion in February.

Germany's industrial production declined unexpectedly from February, adding to uncertainty about the economic expansion in the first quarter. Industrial production declined by 0.5 percent in March after staying flat in February. Economists had forecast a 0.4 percent rise for March.

The UK's visible trade gap narrowed to GBP 10.1 billion from GBP 10.8 billion in February, data from the Office for National Statistics showed Friday. Economists expected a smaller shortfall of GBP 9.8 billion.