TORONTO (CP) — North American stock markets closed higher Thursday amid a rebound in commodity prices and an employment report suggesting the U.S. economic recovery remains on track.
The S&P/TSX composite index ended the day up 38.04 points at 13,569.89 after falling almost 99 points on Wednesday.
New York indexes also post gains after a U.S. Labor Department report showed that weekly applications for jobless benefits dropped 6,000 to 275,000 last week, leaving the key indicator near historic lows.
The Dow Jones industrial average closed up 76.83 points at 16,330.40, while the broader S&P 500 rose 10.25 points to 1,952.29 and the Nasdaq index gained 39.72 points to 4,796.25.
Craig Jerusalim, portfolio manager at CIBC Asset Management, said fundamentals for Canada remain strong despite the recent slide into a mild recession.
Job growth has been strong despite the economic contraction in the first half of the year and low oil prices have a stimulating effect on consumer spending as gasoline prices fall.
“Valuations have now corrected closer to long-term averages, so it’s a good time for patient investors to increase exposure to equities,” Jerusalim said.
The loonie posted a minor advance, rising 0.13 of a U.S. cent to 75.60 cents US.
On the commodity markets, December gold was up $7.30 to US$1,109.30 an ounce, October natural gas advanced 3.2 cents to US$2.683 per thousand cubic feet and December copper added just over a penny to US$2.45 a pound.
The October contract for benchmark crude oil ended the trading day up $1.77 at US$45.92 a barrel.
3Macs analyst Robert Mark said the market is still in the middle innings when it comes to settling on a price for oil after a year-long slide and recent volatile swings.
“We’re still in a process, not just in Canada but globally, where the market’s trying to figure out where the price of oil goes to balance supply and demand,” he said.
The biggest variable for the market is the return of Iranian oil to the market after years of limited supply due to international sanctions, he said.
The recent nuclear deal that is pending before the American Senate will open the spigot in an already oversupplied market, which Mark said could keep oil prices low until the end of next year.
In corporate news, yoga-inspired fashion retailer Lululemon said profits for the quarter would likely be lower than analysts have been expecting. Stock in the Vancouver-based company (Nasdaq:LULU) plunged $10.51 or 16.41 per cent to US$53.54.
In Asia, Japan’s Nikkei 225 index sagged 2.5 per cent after surging 7.7 per cent on Wednesday in its biggest gain since October 2008. Hong Kong’s Hang Seng index dropped 2.6 per cent and China’s Shanghai composite index finished 1.4 per cent lower, while South Korea’s Kospi turned up 1.4 per cent.
Peter Henderson, The Canadian Press
