06/27/2013 08:33 EDT | Updated 08/27/2013 05:12 EDT

TSX up amid rising commodities, strong U.S. consumer, jobs, housing reports

TORONTO - The Toronto stock market racked up a modest gain Thursday as commodity prices moved mainly higher and consumer, housing and employment data pointed to a stronger U.S. economy.

The S&P/TSX composite index gained 53.88 points to 12,005.78.

After markets closed, regulators announced the approval of a revised bid by Bell (TSX:BCE) to acquire Astral Media (TSX:ACM.A) and its suite of TV speciality channels and radio stations in a deal worth $3.4 billion.

The Canadian Radio-television and Telecommunications Commission said the revised bid — in which Bell agreed to sell some of Astral’s specialty TV channels and radio stations — satisfied its concerns that the company would be too dominant in the market.

BCE shares closed up about one per cent prior to the announcement, while Astral shares gained 13 cents to $48.24.

The Canadian dollar edged up 0.04 of a cent to 95.47 cents US.

New York indexes also advanced as the Dow Jones industrials gained 114.35 points to 15,024.49, the Nasdaq ran ahead 25.64 points to 3,401.86 and the S&P 500 index climbed 9.94 points to 1,613.2.

The U.S. Commerce Department said American consumer spending rose 0.3 per cent last month while incomes rose 0.5 per cent in May, the biggest gain since February.

The number of Americans seeking unemployment benefits — a proxy for layoffs — fell 9,000 to a seasonally adjusted 346,000. The four-week average, a less volatile figure, declined to a near five-year low of 345,750.

Also, the number of people who signed contracts to buy U.S. homes jumped in May to the highest level in more than six years.

Buying sentiment also improved after data released Wednesday showed weaker-than-expected U.S. growth in the first quarter, which raised hopes the Fed would be in no hurry to cut back on its US$85 billion of bond purchases each month. Figures showed the U.S. economy grew at a 1.8 per cent annualized rate in the first quarter, instead of the previous estimate of 2.4 per cent.

Kash Pashootan, vice-president and portfolio manager at First Avenue Advisory in Ottawa, a Raymond James company, thinks markets will experience more of the volatility that has been a fixture since late May when traders started to worry that Fed stimulus might decrease. At the same time, he expects them to head higher.

"Either way, you are hedged, because there’s one side of it where you get good economic news — markets go up in the U.S.," he said.

"If you get soft economic news, it suggests economic easing is going to continue. So you’re covered on both ends. And as long as confidence stays high, which it is, markets are going higher."

On the TSX, the base metals component was ahead 2.4 per cent as July copper rose two cents to US$3.06 a pound. Teck Resources (TSX:TCK.B) climbed 48 cents to C$22.24 while First Quantum Minerals (TSX:FM) advanced 60 cents to $15.25.

The gold sector gained about two per cent as bullion prices continued to falter with the August contract down $18.20 to a three-year low of US$1,211.60 an ounce amid continued speculation about when the Federal Reserve may ease up on its monthly bond purchases. Gold prices have deteriorated steadily this year as the precious metal loses its appeal as a hedge against inflation and deteriorating currencies. Goldcorp Inc. (TSX:G) advanced 45 cents to C$23.85.

The consumer discretionary sector pushed up 1.6 per cent. Aimia (TSX:AIM), the company that runs the Aeroplan customer loyalty program, says it’s prepared to replace CIBC (TSX:CM) as its bank credit card partner at the end of this year unless it matches contractual terms offered by TD Bank (TSX:TD). CIBC says it’s reviewing the proposed terms to see if it will exercise its right of first refusal and that it will continue the Aeroplan business as usual in the meantime. CIBC rose 28 cents to $75.31 while Aimia gained $1.48 or 10.63 per cent to $15.40.

The energy sector was ahead 0.3 per cent as the strong American data improved demand prospects and sent the August crude contract on the New York Mercantile Exchange up $1.55 to US$97.05 a barrel. Suncor Energy (TSX:SU) improved by 40 cents to C$30.84.

The tech sector was also supportive with MacDonald Dettwiler & Associates rising $1.87 to $70.34. But BlackBerry (TSX:BB) shed 58 cents or 3.7 per cent to $15.05, a day before the smartphone maker releases its quarterly earnings.

The telecom sector continued to lose ground in the wake of a report that American telecom giant Verizon Communications could be set to compete with the established Canadian players in the wireless business.

The sector fell heavily Wednesday after the Globe and Mail reported that Verizon is looking at two of Canada’s smaller wireless network operators. It has reportedly made an initial offer of $700 million for Wind Mobile and is starting talks with Mobilicity. Rogers Communications fell a further $1.32 or 3.17 per cent to $40.35 after tumbling nine per cent Wednesday.

The mood on markets was further improved as interbank lending rates in China continued to ease after a pledge earlier in the week by authorities to shore up banks facing cash shortfalls.

The central bank had allowed rates that banks pay to borrow from each other to soar last week, part of an attempt by Beijing to clamp down on massive credit in the informal lending industry.

Fears of a credit crisis in the world’s second-biggest economy had contributed to a sell-off in global markets that ended when policy-makers in China softened their stance with the promise to provide "liquidity support" if needed.