Canadian stocks ended higher for a second straight session Friday, amid some upbeat macroeconomic data from the U.S. notwithstanding uncertainty over prospects of the Federal Reserve winding down its bond-buying program. The jump was led by buoyancy in financial and energy stocks, which more than made up for the sharp decline in gold prices.
Investor sentiments were also buoyed after annual inflation rate in Canada slowed to its lowest since October 2009 to 0.4 percent in April, mostly on lower energy prices. The Consumer Price Index for April rose 0.4 percent from last year, following a 1.0 percent increase in March.
In some positive economic news from south of the border, leading economic indicators in the U.S. rose more than anticipated to 0.6 percent in April led by building permits and the interest rate spread, a Conference Board report showed Friday.
Meanwhile, consumer sentiment in the U.S. showed a substantial improvement in May, according to a Thomson Reuters and University of Michigan report Friday. The consumer sentiment index for May rose to 83.7, the highest level in nearly six years.
Earlier today, San Francisco Federal Reserve President John Williams indicated the Fed could slow the pace of its asset purchases as early as this summer if labor market indicators continue to improve, and exit the bond buying program by the year end.
The S&P/TSX Composite Index closed Friday at 12,613.05, up 105.45 points or 0.84 percent. The index touched an intraday high of 12,636.31 and a low of 12,491.45.
The Global Gold Index plunged 3.26 percent, with gold futures for June delivery plummeting $22.20 or 1.6 percent to close at $1,364.70 an ounce Friday on the Nymex.
The Capped Materials Index shed 1.58 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) adding 0.40 percent.
Among gold stocks, Yamana Gold Inc. (YRI.TO) plummeted 5.14 percent, while Goldcorp Inc. (G.TO) shed 2.99 percent. IAMGOLD Corp. (IMG.TO) slipped 4.75 percent, while Kinross Gold Corp. (K.TO) surrendered 2.35 percent. Eldorado Gold Corp. (ELD.TO) dived 3.09 percent, while Barrick Gold Corp. (ABX.TO) dropped 2.75 percent.
The Diversified Metals & Mining Index moved up 0.21 percent, with First Quantum Minerals Ltd. (FM.TO) moving up 0.53 percent, Lundin Mining Corp. (LUN.TO) slipping 0.48 percent, and Teck Resources (TCK.B.TO) up 0.76 percent. Meanwhile, Osisko Mining Corp. (OSK.TO) plunged 7.04 percent.
The Energy Index gained 1.92 percent, with U.S. crude oil futures for June delivery gaining $0.86 or 0.9 percent to close at $96.02 a barrel Friday on the Nymex.
Among energy stocks, Suncor Energy Inc. (SU.TO) gained 2.59 percent, while Canadian Natural Resources Limited (CNQ.TO) added 2.25 percent. Canadian Oil Sands Limited (COS.TO) moved up 2.08 percent, while Surge Energy Inc. (SGY.TO) gained 6.44 percent.
The Financial Index added 1.00 percent, with Manulife Financial Corp. (MFC.TO) up 1.13 percent and Bank of Montreal (BMO.TO) gathering 1.09 percent. TD Bank Group (TD.TO) gained 0.51 percent, while Royal Bank of Canada (RY.TO) jumped 1.87 percent. Bank of Nova Scotia (BNS.TO) added 0.67 percent.
The Information Technology Index added 1.40 percent, with BlackBerry (BB.TO) up 0.20 percent.
The Capped Industrials Index gained 1.28 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) adding 0.64 percent and Air Canada (AC.B.TO) gaining 1.38 percent.
Retailer Sears Canada Inc. (SCC.TO) eased 1.03 percent after having launched its latest Hometown concept store in Orillia with a new 25,000 square-foot location.
In economic news, a report from the Statistics Canada showed Consumer Price Index rose 0.4 percent year-on-year in April, following a 1.0 percent increase in March. Price decreases were largely due to a fall in gasoline prices and the purchase of passenger vehicles. Economists expected 0.6 percent growth in the CPI. On a seasonally adjusted monthly basis, the CPI decreased 0.4 percent in April, after posting no change in March. The decrease in April was the largest decline since October 2008. Meanwhile, the Bank of Canada's core index rose 1.1 percent in the 12 months to April, following a 1.4 percent increase in March.
Separately, the agency said wholesale sales advanced by 0.3 percent in March to $49.1 billion, falling short of a 0.4 percent growth expected by economists. The increase was mainly due to higher sales in the motor vehicle industry. Since May 2012, wholesale sales have been relatively flat. In volume terms, wholesale sales were up 0.1 percent in March.
In economic news from the U.S., the Conference Board's leading economic index rose 0.6 percent in April following a revised 0.2 percent decrease in March. Economists expected the index to increase by a more modest 0.3 percent compared to the 0.1 percent drop originally reported for the previous month.
In a preliminary reading, the consumer sentiment index for May came in at 83.7 compared to the final April reading of 76.4. This was well above economist estimates for a reading of 78.0, the highest level since July 2007. The report also indicates one-year inflation expectations unchanged at 3.1 percent, with the five-to-ten-year inflation outlook seen dipping to 2.8 percent in May from 2.9 percent in April.
From the eurozone, construction output continued its decline for the fifth month in a row in March, Eurostat reported. Production in construction fell at a faster pace of 1.7 percent, following a 0.3 percent drop in February. Building construction and civil engineering slid 1.4 percent and 2.4 percent, respectively. On a yearly basis, overall construction output plunged 7.9 percent, reversing last month's 1.7 percent increase.
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