TSX extends rally to a 7th session amid higher commodities, strong jobs report

TORONTO – The Toronto stock market extended its rally to a seventh consecutive session Friday amid higher commodity prices and a surprising surge in job creation in Canada last month.

The S&P/TSX composite index was up 62.12 points at 15,388.43, while the Canadian dollar rose 0.07 of a U.S. cent to 79.49 cents.

Economists had expected no job growth in March, but Statistics Canada said about 29,000 net jobs were added, although much of it was part-time work, while the unemployment rate remained at 6.8 per cent.

Allan Small, senior adviser at HollisWealth, described the report as more of the “bouncing around” that has been going on for some time, with most of the gains in lower-quality part-time jobs at the expense of full-time employment.

“It just all leads back to the fact that in Canada right now our economy is struggling. We’re struggling with a below two per cent growth rate, we’re struggling with energy, were struggling with employment,” he said.

Still, Small remains reasonably optimistic about the Canadian market even though he’s not bullish on oil — seeing little to take it much higher than current levels — or gold, a hedge that is vulnerable to the rising U.S. dollar.

In particular, Small has been encouraged by the recent strength in financials which he believes were “wrongly sold off when the price of oil started to fall.”

And while he expects more ups and downs on the TSX, he added: “I think we can still scrape out somewhere around a six to seven per cent rate of return for this year, similar to last year.”

But right now the much more diversified U.S. market “is the best place to be,” Small said.

“I think their markets will continue to move higher. As long as the Fed continues to remain accommodating, keeping interest rates low, I think the U.S. will be a winner for investors going forward.”

New York markets were up Friday as investors continued to take in the latest corporate earnings reports.

Among companies reporting was General Electric (NYSE:GE), which announced an up to $50-billion stock buyback and said it planned to sell off most of its financial services arm and focus on its industrial businesses. It shares rose $2.78 or 10.8 per cent to $28.51.

The Dow Jones industrial average closed up 98.92 points at 18,057.65, the Nasdaq advanced 21.41 points to 4,995.98 and the S&P 500 advanced 10.88 points to 2102.06

On the commodity markets, the May crude contract added 85 cents to US$51.64, while June gold rebounded from a three-day string of losses to rise $11 to US$1,204.60 an ounce.

In other corporate news, stock in Bombardier Inc. (TSX:BBD.B) rose sharply after a news report, later denied by a Quebec government minister, said the aircraft and train maker was looking to either sell or spin off its rail division in a deal that could be worth up to US$5 billion.

The issue, up 19 cents at one point, gave back most of the gain and closed up four cents at $2.64.