Toronto stock market edges up on strength of base metals sector; New York closed

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(The Canadian Press)

By Kristine Owram, The Canadian Press

TORONTO - The Toronto stock market was flat in mid-afternoon trading Friday as investors weighed weak oil prices with good news out of the base metals sector.

The S&P/TSX composite index inched up 26.80 points to 10,272.71 led by news that mining giant Teck Resources Ltd. (TSX: TCK-B.TO) has sold a 17.5 per cent stake in the company to lighten its debt load.

Despite the small gain, the index appeared set to post a loss for the week.

Trading volume on the Toronto Stock Exchange was light as U.S. markets were closed Friday in observance of the Independence Day holiday.

The New York Mercantile Exchange was also closed for the holiday, but oil prices fell for the sixth day in a row, losing US$1.10 to $65.63 in electronic trading and weighed down the small gain on the TSX.

The loonie gained 0.01 of a cent to 86.05 cents US.

The TSX base metals sector was the biggest gainer, adding 3.5 per cent. Teck was up $1.91 or 10.3 per cent to $20.41 after the cash-strapped mining giant said it has completed a $1.74-billion private placement.

China Investment Corp. will buy 101.3 million of Teck's class B voting shares for $17.21 each. Teck said the proceeds will go towards paying down nearly US$10 billion in bank debt it took on after the $14-billion purchase of Fording Canadian Coal Trust last year.

Adrian Mastracci, portfolio manager with KCM Wealth Management in Vancouver, said that with markets closed in the United States, Teck's good news was enough to boost the TSX on a slow trading day.

"We are missing direction from the U.S. markets being closed right now, and I think that weighs on Toronto a lot because we do get a fair bit of direction from down south," Mastracci said in an interview.

"It's not surprising that you get a good piece of news like Teck today and it lifts everybody up. It's like the tide coming in."

Teck was one of the best performing stocks on the TSX during the second quarter and has surged more than 170 per cent since March 31.

On Friday, the energy sector slipped 0.5 per cent after losing 1.4 per cent Thursday. Suncor (TSX: SU.TO) was down 37 cents to $32.79 while merger partner Petro-Canada (TSX: PCA.TO) lost 45 cents to $41.53.

The gold sector was flat as bullion added US$1.50 to $932.50 an ounce in electronic trading. Barrick Gold Corp. (TSX: ABX.TO) rose 13 cents to $39.78.

Financial stocks added 0.6 per cent. Toronto-Dominion (TSX: TD.TO) was the biggest gainer, moving up 70 cents to $59.33.

The TSX Venture Exchange edged up 0.45 points to 1,093.03.

Disappointing jobs data out of the U.S. sent all three major U.S. indexes tumbling by more than two per cent on Thursday.

The data - which showed American employers cut a larger-than-expected 467,000 jobs in June, driving the U.S. unemployment rate up to a 26-year high of 9.5 per cent - also sent oil down by US$2.58 to $66.73 a barrel.

The unemployment rate is seen as a key barometer in the U.S. economic recovery and far exceeded the consensus expectation of 365,000 jobs lost.

Canadian Finance Minister Jim Flaherty said Friday he now expects Canada's economic recovery will be modest and job losses will continue into 2010 even after growth begins again.

Economists expect another 30,000 job losses will be logged for June when Statistics Canada releases the latest data next Friday. Canada has lost 363,000 jobs since last October.