TSX to rise amid strong U.S. employment report

Also, the unemployment rate fell from 8.5% to 8.3%.

The Canadian dollar had been lower following the release of a disappointing domestic employment report. Statistics Canada reported that the economy created only 2,300 jobs last month, a far cry from the 25,000 that economists had expected.

The unemployment rate climbed one notch to 7.6% as more people looked for work.

The loonie shook off those earlier losses and gained 0.11 of a cent to 100.15 cents following the positive news from Canada’s biggest trading partner.

“Today’s report reinforces the point that Canada’s job creation engine is cooling markedly,” observed BMO Capital Markets deputy chief economist Doug Porter.

“With domestic drivers now gearing down, the job market needs the U.S. economy to gather some serious momentum to keep the recovery on track.”

U.S. futures accelerated following the release of the jobs report with the Dow Jones industrial futures ahead 95 points to 12,761, the Nasdaq futures gained 21.75 points to 2,513.25 and the S&P 500 futures rose 11.3 points to 1,334.

Meanwhile, there was further evidence that the 17-nation eurozone is heading for recession.

Eurostat, the EU’s statistics office, said retail sales dropped 0.4% during January, in contrast to expectations for an increase of the same amount.

The December data reinforced expectations that the eurozone contracted during the fourth quarter of the year. Eurostat is due to publish its first estimate for the quarter on Feb. 15.

Commodity prices improved following the American jobs report with the March crude contract on the New York Mercantile Exchange up 57 cents to US$96.93 a barrel. Prices have softened since Wednesday when data showed a much larger than expected increase in U.S. crude inventories last week.

The April copper contract was up five cents to US$3.83 a pound.

However, bullion prices declined with the April contract down $1.40 to US$1,755.40 an ounce.

European markets were mixed with London’s FTSE 100 index up 0.42%, Frankfurt’s DAX gained 0.09% and the Paris CAC 40 climbed 0.8%.

Earlier in Asia, Japan’s Nikkei 225 index fell 0.5% but Hong Kong’s Hang Seng ended marginally higher.

Mainland Chinese shares extended gains fuelled by news of fresh support for the farming and small-business sectors, with the benchmark Shanghai Composite Index rising 0.8% while the Shenzhen Composite Index added 1.5%.

In earnings news, Domtar Corp. (TSX:UFS) reported fourth quarter net income dropped to US$61 million, or $1.63 per share, compared to a profit $325 million, or $7.59 per share a year earlier. Sales were flat at $1.37 billion as the paper and pulp producer was affected by both a seasonal slowdown and the rapid decline in global pulp prices.

Heroux-Devtek Inc. (TSX:HRX), a Quebec-based manufacturer of aerospace and industrial products, reports it earned $6.9 million, or 23 cents a share for the three months ended Dec. 31. That was 33.8% higher than $5.2 million, or 22 cents earned a year earlier. Sales rose 8.8% to $93.4 million.