Toronto stocks ended with a moderate gain on Friday as the financials group rallied on interest-rate relief, offsetting a steep drop in energy shares as oil prices retreated from record highs. The Toronto Stock Exchange's key S&P/TSX composite index closed 29.90 points, or 0.26 percent, higher at 11,631.91, ending up 0.2 percent on the week.
"The two big stories are the US and Canadian employment reports and the dampening of credit tightening expectations on both sides of the border," said Fergal Smith, managing market strategist at Action Economics in Toronto. "There's a narrow consensus now in the market for the Bank of Canada to stay on hold next week," he said.
Statistics Canada said on Friday that Canada lost 4,600 jobs in June against forecasts for the creation of 2,500 jobs. The unemployment rate was steady at 6.1 percent, a 32-year low. US employment numbers also lagged expectations. The market interpreted the data as a sign the Bank of Canada is unlikely to raise interest rates on July 11, when it next announces policy. The rate-sensitive financials group rose 1.4 percent.
Royal Bank of Canada gained 86 Canadian cents, or 1.9 percent, to C$46.49, while Canadian Imperial Bank of Canada CM.TO jumped C$1.57, or 2.1 percent, to C$76.92.
That rally offset a sudden dive in energy shares as crude took a hit in late trading, settling at around $74.09 a barrel after hitting a record $75.78 overnight. The heavyweight energy group, which comprises 30 percent of the index's total weight, dropped 1 percent.
Nexen Inc was down 81 Canadian cents, or 1.3 percent, at C$62.19, while Suncor Energy Inc fell C$2.32, or 2.5 percent, to C$90. "It's had a pretty good runup," said Adrian Mastracci, investment counsel and president at KCM Wealth Management Inc, in Vancouver, of the boost in energy shares this week.
"I think some speculators are probably saying maybe it's just time to close the book for the weekend and take a few dollars off the table," he added. Shares of gold miners, part of the resource-laden resources sector, also took a hit and closed down 1.6 percent on a bout of profit-taking. The gold price fell $1.50 to $634.80 an ounce.
Shares of Goldcorp Inc dropped 75 Canadian cents, or 2.2 percent, at C$33.91, while Kinross Gold Corp lost 51 Canadian cents, or 4 percent, at C$12.21. Overall, eight of the TSX index's 10 main groups were higher. Market volume was 218 million shares worth C$4.6 billion. Decliners narrowly outpaced advancers 716 to 706. The blue chip S&P/TSX 60 index closed 3.9 points higher, or 0.6 percent, at 657.42.
The Dow Jones industrial average dropped 134.63 points, or 1.2 percent, at 11,090.67. The Standard & Poor's 500 Index dipped 8.60 points, or 0.67 percent, to 1,265.48. The Nasdaq Composite Index closed down 25.03 points, or 1.16 percent, at 2,130.06.