The Toronto stock market closed moderately higher Wednesday with the energy sector the main drag as oil prices retreated below US$60 a barrel.

The S&P/TSX composite index was up 47.40 points at 15,028.12 in its first sign of strength this week after falling almost 190 points the previous three sessions. The loonie was off 0.22 of a U.S. cent at 83.34 cents.

In New York, buyers flooded back into the markets after three consecutive down days that saw the widely watched Dow Jones industrial average shed more than 130 points.

On Thursday, the Dow reversed that and more, soaring 191.75 points to 18,252.24 on the strength of encouraging news on the U.S. job market and a drop in producer prices that possibly signalled lower inflation and a continuation of historically low interest rates.

Meanwhile, the Nasdaq jumped 69.11 points to 5,050.80 and the S&P 500 shot up 22.62 points to a record high 2,121.10.

In commodities, the June crude oil contract lost 62 cents to US$59.88 a barrel and the TSX energy sector fell 1.89 per cent. Meanwhile, June gold continued its recent tear, up $7 at US$1,225.20 an ounce.

In economic news, the U.S. Labor Department said its producer
price index fell 0.4 per cent in
April after rising 0.2 per cent in March. The core index, which
strips out the volatile food and energy sectors, was down 0.2 per
cent.

CIBC senior economist Andrew Grantham said in a note that the latest figures take the annual rate down to minus 1.3 per cent.

“While the producer price series doesn’t have a great correlation at times with CPI, these soft figures could see forecasters trimming expectations for next week’s CPI release,” Grantham said.

Meanwhile, the Labor Department said that fewer Americans applied for unemployment aid last week. Seasonally adjusted applications were down by 1,000 to 264,000, just above a 15-year low reached three weeks ago.

Tim Caulfield, directory of equities research at Franklin Bissett Canadian Equity Fund, said that while U.S. employment numbers have seen their ups and downs, “I think the trend generally has been continuing to improve.”

“Of course, that’s most important to what is the world’s largest economy and has great bearing on the Canadian economy and North American equities, Canadian equities included,” Caulfield said.

“Obviously we’ve seen significant volatility in the price of crude oil … and today its risk-off for energy equities,” he said, but noted that crude oil price is up 25 per cent quarter to date.

“So $59.50 crude is quite a bit higher than the mid-$45 level that we saw in crude as recently as March.”

Also heartening for the oilpatch is the fact that natural gas now is trading above US$3 per thousand cubic feet, something Caulfield described as “an interesting story that’s been much more positive as of late.”

“(And) in general, we’ve seen pretty good earnings from a lot of the constituents of the TSX, in particular outside of energy,” he said. “That provides a pretty solid backdrop for equity markets.”

In corporate news, Bombardier (TSX;BBD.B) announced it will cut about 1,750 employees in Montreal, Toronto and Belfast, Ireland, over the coming months because of weak demand for its largest business jets. Its stock was up 13 cents or 5.1 per cent at $2.68.