04/08/2013 08:29 EDT | Updated 06/08/2013 05:12 EDT

Toronto stock market up slightly after economic worries inflict sharp losses

TORONTO - The Toronto stock market registered a small gain Monday with traders not inclined to do much after worries about the pace of economic growth last week erased all the TSX's gains since the beginning of the year.

The S&P/TSX composite index gained 12.71 points to 12,344.56 following five losing sessions, leaving the main index down about 86 points or 0.7 per cent lower for the year.

The Canadian dollar continued to lose ground following a big disappointment in March job figures that were released Friday.

The loonie closed down 0.09 of a cent to 98.3 cents US after the Bank of Canada’s business outlook survey indicated Canadian firms have become more pessimistic about the economy and plan to ratchet down investment plans while keeping hiring modest.

U.S. markets gained momentum during the afternoon as traders looked ahead of the release of quarterly earnings from resource giant Alcoa Inc. (NYSE:AA) after the close.

The Dow Jones industrial average rose 48.23 points to 14,613.48, the Nasdaq composite index was 18.39 points higher at 3,222.25 and the S&P 500 index was ahead 9.79 points at 1,563.07.

Alcoa posted earnings per share ex-items of 11 cents versus expectations of eight cents. Revenue of US$5.03 billion missed expectations of $5.88 billion.

Alcoa also said global aluminum demand should rise by seven per cent this year.

The release of Alcoa's earnings is regarded as the start to the quarterly earnings season while the aluminum company itself is regarded as an important gauge of economic growth as its products are used in everything from appliances to vehicles to aircraft.

Alcoa shares were up 15 cents to $8.39 by the close, and drifted five cents higher to $8.44 in after-market trading in New York.

Blue chips led the way higher on the TSX with the utilities component ahead 0.77 per cent. Just Energy Group (TSX:JE) ran up 29 cents to $6.93.

The industrials group was ahead 0.73 per cent as Canadian Pacific Railway (TSX:CP) gained $2.15 to $124.97.

Bombardier Transportation has been granted a US$440-million contract to design and supply major components for the next generation ICx high speed trains for Deutsche Bahn AG. Shares in parent Bombardier Inc. (TSX:BBD.B) gained seven cents to $4.

The TSX also found relief from a 0.56 per cent rise in the telecom sector as Rogers Communications (TSX:RCI.B) rose 81 cents to $51.69.

Commodity prices were generally higher after losing ground last week but resource stocks were generally weak.

The energy sector was slightly higher as the June crude contract on the New York Mercantile Exchange gained 66 cents to US$93.36 a barrel. Prices fell almost five per cent after data late last week showed that crude in storage in the U.S. was at its highest level since 1990 even though refiners had begun to ramp up gasoline production to get ready for the summer driving season. Canadian Natural Resources (TSX:CNQ) climbed 15 cents to C$31.18.

The gold sector was led decliners, down about 1.3 per cent after falling more than seven per cent last week amid lower prices for bullion and gold stocks under pressure because of rising costs. June bullion in New York slipped $3.40 to US$1,572.50 an ounce. Goldcorp Inc. (TSX:G) was down 40 cents to C$31.93.

The base metals component was down 0.18 per cent while May copper gained three cents to US$3.37 a pound after miners in Chile, the world’s biggest producer, said they would announce a nationwide strike on Monday. Economic worries sent copper to eight month lows last week and the mining sector down almost three per cent. First Quantum Minerals (TSX:FM) gave back 33 cents to C$18.96.

The Toronto stock market lost 3.25 per cent last week in the wake of purchasing managers data from China that missed expectations and disappointing reads on the American manufacturing and service sectors. The week was capped off by jobs data from Canada and the U.S. that widely missed expectations, raising doubts about the pace of economic growth and putting fresh pressure on resource stocks.

Financials also lost ground as poor data raised concerns that interest rate hikes are further away than thought.

"We started off the year with some well-known economists thinking the Bank of Canada could raise interest rates even by 25 or 50 basis points this year," said Kevin Headland, director portfolio advisory group at Manulife Asset Management.

"And (there were) weak economic numbers in January and February again. Canada is barely holding its head above water right now. They might have to lower rates."

New York markets on the other hand have managed to hold on to the strong gains netted so far this year amid a resurgent housing market and continued stimulus measures from the U.S. Federal Reserve. The Dow ended last week flat but is still up 11 per cent year to date.

"It’s not that things are so much better (in the U.S.) but it goes back to the old story, Canada does not have a diversified market, it’s where do you find opportunities," added Headland.

As well as a run of earnings this week, investors hope to get a better idea from the U.S. Federal Reserve about whether the central bank plans to withdraw some of its monetary stimulus. Minutes to the last policy meeting of the Fed are due to be published Wednesday.

The TSX Venture Exchange dipped 0.46 of a point to 1,041.39.