The Toronto stock market closed sharply higher Friday, rising to its highest level in more than two years following strong economic data from China and solid earnings reports from General Electric, Morgan Stanley and Google.
The S&P/TSX composite index ran ahead 99.64 points to 13,136 after closing above 13,000 on Thursday for the first time since late July 2011. The increase came amid relief that U.S. lawmakers had reached an agreement to extend the debt limit, thus averting a possible default.
“Things are aligning for Canada,” said Wes Mills, chief investment officer at Scotia Asset Management PM Advisor Services.
“Canada has lagged for a couple of years now on the U.S. in particular. Technically, the TSX has broken out (and) we should be able to challenge the 14,000 level.”
The Canadian dollar was off 0.01 of a cent to 97.14 cents US as inflation pressures increased slightly in September.
Statistics Canada said the Consumer Price Index rose by 0.2 per cent month-over-month in September. That was on top of a 0.1 per cent rise in August.
The agency says the CPI was up 1.1 per cent in the 12 months leading up to September, which matched the annual rate in August.
U.S. indexes were higher as the Dow Jones industrials erased early losses to advance 28 points to 15,399.65, while the Nasdaq rose 51.13 points to 3,914.28 as Google’s stock price cracked the US$1,000 level. The S&P 500 index was ahead 11.35 points at a record high of 1,744.5.
There was positive news from the world’s second-biggest economy as China’s growth rebounded in the latest quarter to 7.8 per cent from a two-decade low of 7.5 per cent in the second quarter, helped by government stimulus measures.
The base metals group led advancers, up 1.7 per cent. Copper prices had earlier advanced in the wake of the data from China, the world’s biggest consumer of the metal, but the December contract on the New York Mercantile Exchange closed unchanged at US$US$3.30 a pound. First Quantum Minerals (TSX:FM) climbed 34 cents to C$18.99.
The telecoms group rose 1.4 per cent with Telus (TSX:T) ahead 79 cents to $35.29.
The industrials sector rose 1.3 per cent. The aerospace division of Bombardier Inc. (TSX:BBD.B) says one of China’s top leasing companies is the previously unidentified customer for up to 30 of its new CSeries aircraft.
The buyer, CDB Leasing Co. Ltd., known as CLC, placed a conditional order in July 2012. Based on list prices, the initial contract would be worth about US$1.02 billion, and at US$2.07 billion if all options were exercised and Bombardier shares gained nine cents to $5.08.
The energy sector rose 0.8 per cent as the Chinese data helped push the November contract 14 cents higher at US$100.81 a barrel. Canadian Natural Resources (TSX:CNQ) gained 52 cents to C$33.78.
Financials were ahead 0.74 per cent and Scotiabank (TSX:BNS) ran up 75 cents to $61.56.
The gold sector was the sole decliner, down about 0.85 per cent after charging ahead almost five per cent Thursday as December bullion lost $8.40 to US$1,314.60 an ounce after running ahead more than $40 on Thursday. Agnico Eagle Mines (TSX:AEM) faded 64 cents to C$25.66.
In corporate news, Google Inc. posted earnings after the close Thursday of nearly US$3 billion, or US$8.75 per share, for the three months ended in September. If not for its expenses for employee stock compensation, Google said it would have earned US$10.74 per share, topping the average estimate of US$10.36 per share among analysts polled by FactSet.
General Electric’s net income fell nine per cent in the third quarter to $3.19 billion, or 31 cents per share, on revenue of US$35.7 billion. Ex-items, GE earned 40 cents per share, five cents higher than forecast and its shares rose 87 cents to US$25.55.
Investment bank Morgan Stanley said its third-quarter earnings almost doubled as the firm’s equity sales and trading revenue rose. The bank earned US$1.01 billion, or 50 cents a share, after stripping out an accounting charge, a dime higher than analysts forecasts. Its shares gained 76 cents to US$29.69.
Strong economic data, solid earnings and relief that at least a short-term fix for the U.S. debt crisis was attained sent the TSX up 1.9 per cent this past week while the Dow industrials climbed 1.07 per cent.