Tech, mining stocks lead TSX higher, U.S. jobless claims data boosts N.Y. stocks

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(The Canadian Press)

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market hung on to a modest gain Thursday afternoon, supported largely by tech, telecom and base metal stocks amid some good news a day before the release of the U.S. government's latest unemployment report.

The S&P/TSX composite index was 42.5 points higher to 11,113.7.

The Canadian dollar was off 0.01 of a cent to 93.99 cents US.

Investors were relieved by a U.S. Labour Department report that the number of newly laid-off workers filing claims for unemployment benefits last week fell to the lowest level in 10 months. Claims came in at 512,000, much better than economists' estimates of 523,000.

Still, companies are reluctant to hire and economists expect the U.S. unemployment rate will tick up to 9.9 per cent when October's figure is reported Friday. It is also expected that another 175,000 Americans lost their jobs in October.

Canadian jobs data also comes out Friday and economists believe the economy added 10,000 jobs last month but the jobless rate is expected to remain unchanged at 8.4 per cent.

The base metals sector advanced 0.75 per cent even as December copper eased three cents to $2.97 a pound. Teck Resources (TSX: TCK-B.TO) advanced $1.34 to $33.18 while HudBay Minerals (TSX: HBM.TO) gained 18 cents to $16.03.

The tech sector was ahead 1.12 per cent in the wake of a strong earnings report from Cisco Systems, while Research In Motion Ltd. (TSX: RIM.TO) said it has been authorized to spend up to US$1.2 billion to buy back its common shares from the open market and cancel them. The BlackBerry maker's shares advanced $1.27 to $62.66 while, in New York, Cisco rose 59 cents to US$23.88.

The telecom sector advanced one per cent with BCE Inc. (TSX: BCE.TO) ahead 47 cents to $26.26.

The gold sector was down 0.37 per cent as bullion moved deeper into record high territory, with the December contract in New York up $2.10 to US$1,089.40 an ounce.

The TSX energy sector was flat as oil prices lost ground amid a strengthening U.S. dollar. The December oil contract on the New York Mercantile Exchange was down 55 cents to US$79.85 a barrel.

Canadian Natural Resources Ltd. (TSX: CNQ.TO) shares slipped $1.02 to $67.58 after the company reported net income of $658 million in the third quarter, down from a year-ago profit of $2.8 billion. Revenue totalled $2.82 billion, down from $4.6 billion last year, as lower natural gas prices and higher production costs took their toll.

The TSX financial sector was flat amid earnings reports from two big insurers.

Sun Life Financial Inc. (TSX: SLF.TO) shares lost $1.75 to $28.36 after it cut its third-quarter loss by more than half but not as much as analysts had expected. The company turned in a net loss of $140 million, an improvement from a net loss of $396 million a year ago. Revenue more than tripled to $8.8 billion.

And Manulife Financial (TSX: MFC.TO) turned in a net loss of $172 million, or 12 cents a share, compared with earnings of $510 million, or 33 cents a share a year earlier. Its shares fell 81 cents to $19.78.

Many analysts think the markets are at a crucial juncture after running practically straight up since early March and that stocks could be facing a year-end slide. Over the last couple of months, most of the dips have proved to be short-lived.

However, the markets have been very volatile over the last couple of weeks, with many traders wondering whether current stock valuations are justified by the wider economic fundamentals.

"It's going to be a choppy path forward because the fundamentals aren't that great, especially south of the border," said John Stephenson, portfolio manager at First Asset Funds Inc.

"The tone is definitely positive but ... there's no conviction in the strength of this rally. And while I do believe the rally is legit and I believe we will, over long periods of time, go higher, and substantially higher from here, at least in Canada, I think the easy sledding is behind us."

The TSX Venture Exchange was off 1.21 points to 1,330.14.

New York markets were up sharply as retailers posted their second consecutive gain in sales in October after more than a year of declines, proving that consumers are starting to spend a little more.

The Dow Jones industrials rose 182.4 points to 9,984.6.

The Nasdaq composite index advanced 48.95 points to 2,104.47 while the S&P 500 index was up 19.05 points to 1,065.55.

In other earnings news, Goldcorp Inc. (TSX: G.TO) increased its production guidance Wednesday as it reported a profit of US$114.2 million in its latest quarter. The gold miner said it expected to produce 2.4 million ounces, up from earlier guidance for production of 2.3 million ounces and its shares edged nine cents higher to $42.73.

Elsewhere, Canadian fertilizer giant Agrium Inc. (TSX: AGU.TO) has made what it calls a "best and final" offer for U.S. competitor CF Industries Holdings Inc. (NYSE: CF) - a bid that values U.S. company, which has so far been highly resistant to its overtures, at about US$4.5 billion. Agrium shares advanced $2 to $53.23.