Stocks little changed on weak October employment data from Canada, U.S.

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(The Canadian Press)

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was slightly higher late Friday morning, held aloft by rising gold stocks as bullion continued to advance.

But investors weren't otherwise inclined to do much amid employment news from Canada and the United States that missed expectations. The S&P/TSX composite index gained 11.9 points to 11,192.7.

Statistics Canada said more than 43,000 jobs were lost last month, a huge miss from economists' consensus which forecast the addition of 10,000 jobs. And the unemployment rate jumped two-tenths of a point to 8.6 per cent, against expectations that it would stay unchanged.

The Canadian dollar was moved down 0.35 to 93.48 cents US in the wake of the Canadian report.

In the U.S., the Labour Department reported that 190,000 jobs were lost last month, against estimates of about 175,000, while the jobless rate came in at 10.2 per cent, up sharply from 9.8 per cent.

The TSX gold sector ran up almost three per cent as the precious metal continued to move further into record territory. The December bullion contract on the Nymex climbed $5 to US$1,094.30 an ounce after going as high as US$1,101.90. Goldcorp Inc. (TSX: G.TO) gained $1.20 to C$44.38 and Barrick Gold (TSX: ABX.TO) ran up $1.10 to $44.58.

The base metals sector was up 0.76 per cent as December copper was unchanged at US$2.96 a pound. Ivanhoe Mines (TSX: IVN.TO) climbed 23 cents to $12.93.

The TSX energy sector was flat as oil prices retreated on the latest indication of a weak U.S. economy. The December crude contract on the New York Mercantile Exchange fell $1.07 to US$78.59 a barrel. Canadian Natural Resources (TSX: CNQ.TO) was up $1.45 to $69.16 while EnCana Corp. (TSX: ECA.TO) stepped back 74 cents to $61.03.

The financial and telecom sectors were weak.

Telus Corp. (TSX: T.TO) reported that net income fell to $280 million or 88 cents per share in the third quarter, down from $286 million or 89 cents per share a year earlier. Operating revenue slipped by 1.6 per cent to $2.41 billion from $2.45 billion. Telus shares moved 48 cents lower to $33.50 as it also said it now expects 2009 revenue to be from $9.6 billion to $9.7 billion, which is lower than a range of between $9.7 billion to $9.9 billion issued in May.

The TSX Venture Exchange moved up 6.68 points to 1,338.23.

New York markets were slightly lower as investors looked for positives in the disappointing jobs data.

"The headline number was a miss but it's important to look through the numbers," said Jeff Bradacs, senior investment analyst at MFC Global Investment Management.

"What we saw in the previous two months was positive revisions - September 260,000 job losses to 219,000, August from minus 210,000 to minus 154,000 so through the numbers we saw some positive revisions despite the headlines."

Bradacs added that recent readings on the U.S. manufacturing and service sectors have shown expansion and corporate earnings were "fairly strong" for the most recent quarter, with about 80 per cent of companies beating expectations.

The Dow Jones industrials was off 3.3 points to 10,002.7.

The Nasdaq composite index slipped 0.4 of a point to 2,104.92 and the S&P 500 index edged 1.05 points lower to 1,065.6.

The market has been expecting U.S. unemployment to top 10 per cent before peaking. But the pace of job losses has accelerated and is likely to go higher.

The report bodes poorly for American consumer spending, a major component of economic activity. Consumers will keep a tight lid on their spending if they are worried about losing their jobs. And robust consumer spending is necessary to sustain the economic recovery.

Auto parts giant Magna International (TSX: MG-A.TO) also lifted the TSX, up $5.59 or 11.8 per cent to $52.66. The surge followed a 10 per cent rise on Wednesday after General Motors Co. said it will keep its European Opel unit and restructure it instead of selling a 55 per cent stake to Magna and its partner, Russian lender Sberbank.

Toronto investors took in earnings reports from a variety of major Canadian corporations.

Suncor Energy Inc. (TSX: SU.TO) is reporting third-quarter net earnings of $929 million, or 74 cents per common share, in its first quarterly earnings report since merging with Petro-Canada. That compares to net earnings of $815 million, or 87 cents per common share, in the year-ago period. But Suncor's operating earnings plunged in the quarter to $288 million, compared to $810 million a year ago and its shares advanced 12 cents to $35.49.

Air Canada (TSX: AC-B.TO) reported a quarterly profit of 4277 million or $2.44 a share in the third quarter, thanks to lower fuel prices and foreign exchange gains. That was an improvement from a year-ago net loss of $132 million or $1.32 per share. Air Canada's operating revenues totalled $2.7 billion for the quarter, down from $3.1 billion last year and its shares were unchanged at $1.14.

Brookfield Asset Management Inc. (TSX: BAM-A.TO) said net income fell to US$112 million or 17 cents per diluted share in the third quarter, down from US$171 million or 27 cents per share a year earlier. Revenue declined to just under $3 billion from $3.2 billion in the third quarter of 2008. Revenue was in line with analyst estimates but EPS beat expectations by three cents per share. Brookfield shares gave back 67 cents to $22.53.

Overseas, Asian stocks climbed ahead of the release of the American jobs data.

Japan's Nikkei 225 stock average rose 0.7 per cent and Hong Kong's index gained 1.6 per cent.

London's FTSE 100 index moved up 0.11 per cent, the DAX was flat and the Paris CAC 40 slipped 0.21 per cent.