Source: The Canadian Press

The Toronto stock market was higher Wednesday as data showing evidence of weak but better-than-expected growth in U.S. private sector employment and the American service sector fuelled enthusiasm for gold and commodities.

The S&P/TSX composite index gained 62.45 points to 11,845.05 while the TSX Venture Exchange was up 12.38 points to 1,453.46.

The Canadian dollar rose 0.6 of a cent to 98.27 cents US, its highest level since May 3.

Investors were pleased at data from the U.S. Institute for Supply Management showing its service sector index rose to 54.3 last month, up from 53.8 in June. Economists had expected a reading of 53 for July.

The index shows service companies have been expanding every month this year, but at a less robust pace than the manufacturing sector. Still, the report was good news, coming two days before the U.S. government issues its non-farm payrolls report for July and economists expect it to show the private sector produced a modest 90,000 jobs.

The ISM report was especially encouraging because the services sector accounts for the majority of employment in the U.S.

“There is still a question in the back of people’s minds: Has there been a turnaround?” said Fred Ketchen, manager of equity trading at Scotia Capital.

“When you’re talking about the U.S., the unemployment rate is expected to rise to 9.6% (from 9.5% in June). That’s fairly substantial, that’s almost one in 10 people are out of work. We’re hoping that our worst fears (of a double dip recession) aren’t met down there.”

Earlier Wednesday, payroll company ADP reported that private sector employers added 42,000 jobs last month, on top of 13,000 in June. The July figure was better than the 40,000 job gains that had been expected.

The gold sector led advancers as the December bullion contract on the Nymex moved ahead $8.40 to US$1,195.90 an ounce. On the TSX, Barrick Gold (TSX:ABX) advanced 92 cents to C$43.38 while Goldcorp Inc. (TSX:G) improved 96 cents to $40.72.

Consumer discretionary stocks were also supportive with Shaw Communications (TSX:SJR.B) up 65 cents to $20.95.

The base metals sector was ahead 0.5% with September copper in New York up five cents to a three month high of US$3.40 a pound. Hopes that the global economic rebound is intact pushed copper ahead 12% during July.

Thompson Creek Minerals (TSX:TCM) gained 35 cents to C$9.95 while HudBay Minerals (TSX:HBM) climbed $1.06 to $13.95.

The TSX energy sector was 0.14% higher as oil prices were off slightly despite a report which showed a bigger than expected drawdown of U.S. crude inventories last week.

Benchmark crude for September delivery dipped eight cents from Tuesday’s three-month high to US$82.47 on the New York Mercantile Exchange after the U.S. Energy Information Administration reported a drop of 2.8 million barrels. Analysts polled by Platts had expected a decline around 1.2 million barrels. At the same time, the EIA reported gasoline stocks rose by 700,000 barrels, against expectations of a decline around 870,000.

Suncor Energy (TSX:SU) declined 24 cents to $34.47 while Canadian Oil Sands Trust (TSX:COS.UN) was ahead 39 cents to $27.25.

The tech sector was the weakest component, pulled down by market heavyweight Research in Motion Ltd. (TSX:RIM). The BlackBerry maker’s shares dropped $2.53 or 4.46% to $54.24 on volume of 4.3 million shares after several countries in emerging markets said they will ban services such as email and messaging on BlackBerrys due to national security concerns. Countries such as United Arab Emirates, Indonesia and Saudi Arabia want to ban some of the device’s services because governments can’t monitor content as it passes through the system. But RIM said it won’t compromise user privacy on the BlackBerry.

RIM officially unveiled its latest smartphone Tuesday, a new touchscreen model with a slide-out keyboard designed to challenge Apple’s iPhone.

“The sense is they have a new product and they kept talking about this new product all the way along during development and it was supposed to be an answer to everything and anything, but you have these problems in foreign countries where they want to interfere with RIM’s technology,” added Ketchen.

New York’s Dow Jones industrial average moved 44.05 points higher to 10,680.43.

The Nasdaq composite index climbed 20.05 points to 2,303.57 while the S&P 500 index was ahead 6.78 points to 1,127.24.

On the earnings front, fertilizer producer Agrium Inc. (TSX:AGU) reported its second-highest quarterly net earnings of US$506-million in the second quarter, compared with earnings of $370 million a year ago. Net sales in the quarter rose to nearly $4.4 billion from US$4.1 billion and its shares rose $2.33 to C$67.41.

Industrial products maker ATS Automation Tooling Systems Inc. (TSX:ATA) says profits moved higher in the first quarter, and that the company plans to separate its troubled Photowatt solar energy division. The company said consolidated net income was $6.4 million for the three months ended June 27, an increase from $300,000 in the comparable period ended June 28, 2009. Revenues dipped to $151.1 million from $152.7 million. ATS shares rose 25 cents to $6.60.

Shares in Enbridge Inc. (TSX:ENB) were unchanged at $51.40 after it offered to buy up to 200 homes in the area of southern Michigan affected by a rupture of one of its oil pipelines. The spill dumped millions of litres of oil into a southern Michigan waterway.