03/09/2012 08:50 EST | Updated 05/09/2012 05:12 EDT

TSX rises amid solid American job creation report, higher commodities

TORONTO - The Toronto stock market closed modestly higher Friday amid a solid U.S. employment report that signalled a strengthening economy.

The S&P/TSX composite index was ahead 41.69 points to 12,503.62 as rising commodity prices pushed mining stocks higher while the TSX Venture Exchange rose 15.47 points to 1,649.81 .

The U.S. non-farm payrolls report said that the American economy cranked out 227,000 jobs, in line with expectations, while the jobless rate held steady at 8.3 per cent.

"The jobs number is definitely a positive for the market but the market was anticipating a strong number," said Jeff Bradacs, portfolio manager at Manulife Asset Management.

"Initial jobless claims have been moving to a favourable direction, we had the ADP report which was also favourable, so really the market was expecting a strong number and that’s what we had."

The TSX often gets a lift from positive U.S. data as it raises hopes for higher demand for commodities and Canadian manufactured goods.

The Canadian dollar had earlier enjoyed a lift from the positive U.S. data despite a weak domestic employment report but ended the session down up 0.02 of a cent to 100.92 cents US.

Statistics Canada said that the Canadian economy unexpectedly shed 2,800 jobs last month. Economists had estimated the economy would create about 15,000 jobs during the month.

Statistics Canada also reported that the unemployment rate dipped to 7.4 per cent from 7.6 per cent because the number of Canadians looking for work fell by 37,900, all in Ontario.

The Dow Jones industrial average rose 14.08 points to 12,922.02. The Nasdaq composite index gained 17.92 points to 2,988.34 and the S&P 500 index was up 4.96 points to 1,370.87.

Markets and the Canadian dollar closed off early highs amid a move associated with Greece's success in persuading the vast majority of its private creditors to slash the value of their Greek bond holdings, paving the way for the country’s second massive international bailout.

Greece’s Finance Ministry said earlier Friday that 85.8 per cent of private investors holding its Greek-law bonds had signed up to the deal, and that it aimed to use legislation forcing holdouts to participate.

That meant the credit swap was no longer voluntary for everyone and the International Swaps and Derivatives Association ruled Friday afternoon that the Greek government had triggered a "credit event," meaning that holders of credit-default swaps on Greek bonds will be able to claim insurance payments.

Market reaction to this was muted because the ISDA announcement was expected and "while this triggers credit default swaps, the total exposure is only US$3.2 billion," observed Colin Cieszynksi, market analyst at CMC Markets Canada.

The Greek government said the deal will massively reduce the country’s debt by €105 billion, or about 50 percentage points of gross domestic product.

If the swap had failed, Greece would have faced defaulting on its debts in two weeks, when it faced a large bond redemption.

The TSX market also found lift from possible major dealmaking in the consumer staples sector.

Neo Material Technologies (TSX-NEM) was the most-active company Friday on the Toronto Stock Exchange, rising more than 37 per cent a day after the Canadian rare earth processor announced a $1.3-billion friendly takeover offer. Neo Material stock gained $2.97 to close at $10.94, with nearly 22.7 million shares traded.

Molycorp shares were also up Friday, rising $4.91 or nearly 19 per cent to end regular trading at US$30.89 on Nasdaq.

Shares in Viterra Inc., Canada's largest publicly traded grain handler, surged $2.60 or 23.68 per cent to $13.58 as the company acknowledged that it has received "expressions of interest" from unnamed third parties concerning a possible takeover. The deal could be worth more than $5 billion, based on the company's stock price.

No other details were released by the company, which said it was making the announcement "in view of market activity in Viterra's shares."

The base metals sector advanced 1.19 per cent as improving demand prospects pushed May copper up seven cents to US$3.86 a pound following and American jobs data and news that China’s inflation fell sharply in February, giving Beijing more leeway to stimulate the world’s second-biggest economy. China is the world's biggest copper consumer.

Teck Resources (TSX:TCK.B) rose 33 cents to $36.53 while HudBay Minerals (TSX:HBM) was up 50 cents to C$12.17.

The energy sector added 0.12 per cent as the April crude contract on the New York Mercantile Exchange gained 82 cents to US$107.40 a barrel. Cenovus Energy (TSX:CVE) declined 47 cents to $37.42 while Canadian Natural Resources (TSX:CNQ) advanced 16 cents to $35.51.

The gold sector was down about 0.3 per cent as gold advanced $12.80 to US$1,711.50 an ounce. Barrick Gold Corp. (TSX:ABX) faded 22 cents to $45.45.

In other corporate news, Research In Motion Ltd. (TSX:RIM) has acquired Paratek Microwave Inc. of Nashua, N.H., which makes radio-frequency components for mobile wireless communications. Paratek’s radio-frequency tuning technology has the potential to help RIM BlackBerry devices upload and download large amounts of data faster. RIM shares gained 35 cents to $13.46.

And cruise line Carnival (NYSE:CCL) said its earnings this year could be trimmed by as much as 82 per cent due to the sinking of the Costa Concordia off of Italy, which killed 32 people in January. Carnival expects net income of between US$1.40 and $1.70 per share. It previously forecast of $2.55 to $2.85 per share. Carnival Corp. posted losses of $139 million, or 18 cents per share, for the first quarter Friday and its shares dipped 38 cents to US$30.57.

The Toronto market finished the week down 1.12 per cent, leaving the TSX up 4.6 per cent year to date.