TORONTO - On Wednesday, the Toronto stock market closed higher after reports of a shrinking trade deficit and unofficial job gains in the United States as well as signs of optimism in the European Union.
The S&P/TSX composite index was up 49.94 points at 15,154.68, with gains in seven of the index's 10 subsectors.
Two positive indicators south of the border buoyed U.S. markets.
Payroll processor ADP said that the U.S. economy added 201,000 jobs in May, up from 165,000 in the previous month.
The U.S. trade deficit, considered a drag on economic growth in the first three months of the year, shrank by 19 per cent in April.
The Dow Jones industrial average rose 64.33 points to 18,076.27, the Nasdaq index rose 22.71 points to 5,099.23, and the S&P 500 advanced 4.47 points to 2,114.07.
Canada's trade deficit narrowed to $3 billion in April, much larger than the $2.1 billion analysts surveyed by Thomson Reuters had predicted but an improvement from the previous month's record high.
The loonie ended the day trading at 80.30 cents US, down 0.29 of a U.S. cent.
Earlier Wednesday, the European Central Bank raised its 2015 inflation forecast from flat growth to 0.3 per cent.
"People are more optimistic about Europe and the prospect that the U.S. isn't going to be doing all the heavy lifting on its own," said Norman Rashkowan, senior partner at Sage Road Advisers. "That's helpful for Canada because our economy is sensitive to global growth."
The spectre of European deflation was worrying global markets, he said, but the threat seems to be receding as Spain, Italy, France, and others posted positive first-quarter GDP growth.
On the commodity markets, the July crude contract was down $1.62 to US$59.64 a barrel.
Rashkowan said oil seems to be stuck in a trading range between $50 and $60 a barrel as worldwide production remains high and the OPEC oil cartel shows no sign of slowing the pace of extraction.
"People are appreciating that perhaps it's going to take longer to get oil prices rising in a sustained fashion," Rashkowan said. "Instead, you're probably looking at an environment where they're going to be sort of moving sideways."
The August gold contract fell $9.50 to US$1,184.90 an ounce. Rashkowan said gold too appeared to be moving sideways around a value of $1,200 as investors consider the prospects for growth in the American economy.
The market seemed to be ignoring Greece's Friday deadline for a 300 million euro debt payment, Rashkowan said, with traders betting that a last-minute deal will be reached to avoid bankruptcy or the country's exit from the euro currency.
Note to readers: This is a corrected story. A previous version had incorrect closing figures for the Dow Jones industrial average, Nasdaq index and S&P 500.