TSX moves higher amid rising commodities

TORONTO -- The Toronto stock market was positive Thursday as traders looked to key housing, employment and manufacturing data along with rising commodities.

The S&P/TSX composite index gained 29.84 points to 11,935.28 while the TSX Venture Exchange climbed 4.79 points to 1,211.41.

The loonie was off 0.06 of a cent to 101.05 cents US as Statistics Canada reported manufacturing shipments dropped 0.4 per cent in June. Economists had expected a 0.3 per cent gain, but at the same time the agency revised the May showing to flat from a drop of 0.4 per cent.

U.S. markets weakened after a key measure of manufacturing in the U.S. Northeast came in worse than expected.

The Philadelphia Federal Reserve's manufacturing index registered a negative reading for a fourth month, coming in at minus 7.1, which was a bit better than July's reading of minus 12.9. But economists had expected a reading of minus 5.0.

The Dow Jones industrials added 2.06 points to 13,166.84, the Nasdaq composite index was ahead 6.7 points to 3,037.63, and the S&P 500 index inched up 1.25 points to 1,406.78.

Other data showed that U.S. builders slowed the pace of housing construction slightly in July as construction of single-family homes and apartments dipped 1.1 per cent in July compared with June to a seasonally adjusted annual rate of 746,000.

But in a hopeful sign for future construction, building permits increased 6.8 per cent to a seasonally adjusted annual rate of 812,000 in July. This is the highest level since August 2008.

Other data showed the number of Americans applying for unemployment benefits rose by 2,000 to 366,000. However, the less volatile four-week average fell by 5,500 to 363,750. That was the lowest level since late March.

Analysts also note trading is likely to feature low volumes in the traditional summer lull that grips trading desks. Investors are also cautious in the run-up to policy statements from the world's leading central banks.

Markets have rallied since the lows of the year in early June on optimism the world's central banks will do more to shore up the global economy.

While the European Central Bank is expected to restart its bond-buying program to keep a lid on the borrowing rates of Spain and Italy, the U.S. and Chinese monetary authorities are widely tipped to back more easing measures to boost their economies.

Chinese Premier Wen Jiabao, during a visit to eastern China earlier this week, was quoted by the official Xinhua news agency as saying the country has the "conditions and capabilities" to meet its 7.5 per cent economic growth target this year.

His comment helped push oil prices higher on top of a gain of almost US$1 Wednesday in the wake of data showing a much bigger than expected drawdown of American crude inventories last week. On Thursday, the September contract on the New York Mercantile Exchange edged up 26 cents to US$94.59 a barrel.

The energy sector rose 0.22 per cent while Canadian Natural Resources (TSX:CNQ) was ahead 26 cents to C$31.07.

The gold sector provided lift, rising one per cent as December bullion rose $3.60 to US$1,610.20 an ounce. Goldcorp Inc. (TSX:G) climbed 34 cents to C$36.58.

Barrick Gold Inc. (TSX:ABX) was in focus as the world's biggest gold miner said it is holding talks that could result in the sale of its majority stake in spinoff African Barrick Gold to China's largest gold producer. ABG is Tanzania's largest gold producer and one of the five largest gold producers in Africa, but production costs have been higher than anticipated, Barrick Gold said in its recent second-quarter financial report. Barrick shares ran up 80 cents to $35.06.

The base metals sector was up 0.2 per cent while copper prices lost early momentum and were unchanged at S$3.35 a pound. First Quantum Minerals (TSX:FM) rose 16 cents to C$19.27.

The telecom sector was the weakest component with Telus Corp. (TSX:T) 68 cents lower at $64.20.

Earnings news was uneven.

Tech bellwether Cisco Systems said after the close Wednesday that it was raising its dividend by 75 per cent to 14 cents a share as the company beat analyst expectations on quarterly earnings and revenue. Its shares surged 7.38 per cent to US$18.63.

Wal-Mart Stores Inc.'s second-quarter net income rose 5.7 per cent and the retailer raised its full-year profit outlook. But quarterly revenue came in short of expectations and its stock was down three per cent to US$72.27.

Elsewhere on the retailing front, Reitmans (Canada) Ltd. (TSX:RET) said Wednesday that its sales for August have been hurt by problems with a new warehouse management system at its distribution centre. It said it believes the situation has been fixed, but the disruptions in the shipping and receiving of merchandise to stores would hurt sales and margins for the third quarter. Its shares gave back 19 cents to C$12.31.

And Facebook sank almost seven per cent to US$19.79 on the first day that its early investors and a handful of founders were free to sell their stock. In all, 271 million shares can be sold, according to Facebook's regulatory filings. Facebook has plunged since its Initial Public Offering, when it went as high as $45.

European bourses were mixed as London's FTSE 100 index slipped 0.29 per cent, Frankfurt's DAX moved up 0.17 per cent and the Paris CAC 40 rose 0.24 per cent.