CANADA STOCKS-TSX roused from 3-day fall by US data, IMF remarks

Fri Oct 12, 2012 2:16am IST

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* TSX closes 21.53 points, or 0.18 pct, higher at 12,233.95
    * All 10 index sectors stronger, led by commodities

    By Claire Sibonney
    TORONTO, Oct 11 (Reuters) - Canada's main stock index rose
slightly on Thursday, recovering from three days of losses that
culminated in a five-week low,  encouraged by U.S. employment
data and comments from the IMF that were seen as supporting
stability in the euro zone.
    All 10 of the index's sectors were higher, led by
resource-related shares as commodity prices rose. 
    Among the top advancers, Potash Corp was up 2.2
percent at C$41.43, Encana Corp climbed 2.7 percent to
C$21.79, and Teck Resources added 1.6 percent to
C$30.39.
    Market sentiment was boosted by data that showed U.S.
initial jobless claims fell to the lowest level in more than
4-1/2 years. 
    That report followed a U.S. government report last week that
showed a surprising drop in September's unemployment rate to 7.8
percent.
    "I think that the tone was set very early in the day with
the U.S. initial jobless claims coming in significantly better
than expected," said Craig Fehr, Canadian market strategist at
Edward Jones in St. Louis.
    "So a bit of a carry-on from the most recent employment
report we got in the States, which is to suggest that
conditions, while certainly not the level where most investors
would want to see them, are continuing to show modest
improvement and that's reflective of continued slow growth in
the economy."
    The Toronto Stock Exchange's S&P/TSX composite index
 ended up 21.53 points, or 0.18 percent, at 12,233.95,
which was well off the day's high of 12,295.43 as the TSX
tracked Wall Street lower on a drop in Apple shares
after a legal ruling went against the company. 
    Early in the day, markets reacted positively to remarks from
Christine Lagarde, the IMF's managing director, who said that
indebted euro zone economies should have more time to cut budget
deficits. Lagarde's comments helped to offset news of a
downgrade of Spain's credit rating. 
    "I think the downgrade of Spain was already priced in," said
Gavin Graham, president of Graham Investment Strategy.
    "The fact is that there's no way Spain is investment grade
at present, so it's a question of what is the political will on
the part of the European authorities to continue buying Spain,
and for that matter Italian, bonds."  
    Looking forward, investors will continue to follow U.S.
company earnings for direction. The third-quarter earnings
season got off to a disappointing start on Tuesday and Wednesday
with worrying reports from Chevron and Alcoa.
    "We're drifting along a little bit and there's no question
as we move now into third-quarter earnings season we're going to
have a split focus by the markets between what's going on in
Europe, the broad economic focus, and certainly a more micro
economic focus on exactly what companies are delivering this
quarter," Fehr said.
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