TSX closes higher, data shows Chinese, American manufacturing sectors advancing
TORONTO - The Toronto stock market closed higher as widely-watched manufacturing indexes for China and the U.S. hit their highest levels so far this year.
The S&P/TSX composite index gained 76.56 points to 14,680.72.
The Canadian dollar was lower, down 0.47 of a cent to 91.76 cents US.
U.S. markets also were generally higher after the Institute for Supply Management twice corrected its May manufacturing index to show that factories grew at a strong pace last month. Markets had reacted negatively earlier in the morning after the original report said that manufacturers had expanded at a weaker pace.
The Dow Jones industrials gained 26.46 points to 16,743.63, Nasdaq declined 5.42 points to 4,237.2 and the S&P 500 index added 1.4 points to 1,924.97.
The ISMâ€™s manufacturing index for May now reads 55.4, up from 53.2 in the initial report and Aprilâ€™s reading of 50.4. Any reading above 50 indicates expansion.
"At the revised level, the factory ISM now adds to signs of a pick-up in growth during the second quarter," said economist Andrew Grantham at CIBC World Markets.
Hopes for a second quarter rebound have been high, particularly after data released last week showed that the U.S. economy contracted by a larger than expected one per cent in the January-March quarter, due in large part to severe winter weather.
The world's second-biggest economy also had positive manufacturing data on Monday. The China Federation of Logistics and Purchasing said its monthly manufacturing index rose to 50.8 points in May.
There is a heavy slate of economic data this week, capped on Friday by Canadian and U.S. jobs reports.
Economists forecast another month of strong job gains. They expect the U.S. economy cranked out about 219,000 jobs in May following a 288,000 gain in April. In Canada, economists estimate about 21,000 jobs were added in May.
On the TSX, the base metals sector led advancers, up 1.47 per cent as the Chinese data pushed the July copper contract up five cents to US$3.17 a pound.
The energy sector rose 0.77 per cent as July crude in New York declined 24 cents to US$102.47 a barrel.
The gold sector fell 0.64 per cent, with July bullion $2 lower to US$1,244. Bullion prices fell 3.5 per cent last week with markets feeling more comfortable about the Ukraine crisis and more concerned about deflation rather than inflation, particularly in Europe.
On the corporate front, trucking and delivery company TransForce Inc. says it has a US$310-million deal to buy Minnesota-based Transport America, Inc., which offers transportation services across the United States. TransForce (TSX:TFI) says the acquisition is expected to generate annual revenues of about US$350 million for the Quebec company. Its shares were 36 cents lower at $23.34.
Pershing Square Capital Management LP is seeking to replace a majority of directors at Allergan Inc. at a special meeting of shareholders. The move is part of a plan to back a proposed takeover of the Botox maker by Quebec-based Valeant Pharmaceuticals International Inc. (TSX:VRX). The investment firm headed by Bill Ackman is the largest shareholder at Allergan with a 9.7 per cent stake. On Friday, Valeant raised its stock-and-cash offer to about US$180 per share, valuing Allergan at more than US$54 billion. Valeant shares closed up $3.83 to $146.17.
Note to readers: This is a corrected story. An earlier version incorrectly stated the ISM index figure.
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