A weak U.S. jobs report further stoked hopes of interest rate cuts, while strong numbers in Canada helped to lift the loonie to a three-month high.
The S&P/TSX composite index closed up 3.16 points, or 0.02 per cent, at 16,230.96, led higher by tech, health care and energy stocks.
The Canadian economy showed signs of strength in May as it added 27,700 jobs and the unemployment rate fell to its lowest level since comparable data become available in 1976.
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Statistics Canada said Friday the unemployment rate fell to 5.4 per cent, compared with 5.7 per cent in April as the number of people looking for work fell sharply.
Economists on average had expected the addition of 8,000 jobs for the month and an unemployment rate of 5.7 per cent, according to Thomson Reuters Eikon.
The Canadian dollar traded at an average of 75.28 cents US, up from an average of 74.75 cents US on Thursday.
Tech stocks gain 1.2 per cent. Shares of Enghouse Systems Ltd. gained 2.7 per cent after the company reported quarterly revenue above expectations. Shopify rose 2.1 per cent and Descartes added 1.9 per cent.
Health care stocks gained 0.8 per cent. Aphria was up 4.5 per cent, Hexo added 1.7 per cent and Canopy was up 1.5 per cent.
Transcontinental Inc. fell 5.2 per cent, the most on the TSX, after multiple analysts cut price targets on the company following quarterly results.
The July crude contract was up US$1.40 at US$53.99 per barrel and the July natural gas contract was up 1.3 cents at $2.34 per mmBTU. Energy stocks rose 0.4 per cent. Cenovus was up 3.9 per cent, Torc gained 3 per cent and Canadian Natural Resources was up 1.1 per cent.
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The August gold contract was up $3.40 at US$1,1346.10 an ounce and the July copper contract was down 2.3 cents at US$2.63 a pound.
Wall Street’s major indexes charged higher on Friday, as sharply slowing U.S. job growth boosted hopes for Federal Reserve interest rate cuts while optimism about potential progress in U.S. trade fights with China and Mexico added to risk appetites.
Based on the latest available data, the Dow Jones Industrial Average rose 262.87 points, or 1.02 per cent, to 25,983.53, the S&P 500 gained 29.76 points, or 1.05 per cent, to 2,873.25 and the Nasdaq Composite added 126.55 points, or 1.66 per cent, to 7,742.10.
The S&P 500 was on track for a 4.6-per-cent gain for the week, which would be its biggest since November.
A Labor Department report showed nonfarm payrolls increased by 75,000 jobs last month, much smaller than the 185,000 additions estimated by economists in a Reuters poll, suggesting the loss of momentum in economic activity was spreading to the labor market.
Investors took the jobs miss as a sign that the Fed would turn more accommodative to blunt the impact of escalating trade tensions on the economy. Traders raised their bets for a rate cut in July followed by two more rate cuts by year-end.
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“It plays into a softening growth picture and perhaps lends more credence to additional rate cuts potentially above what the market’s looking for right now,” said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management in Chicago.
“You’re getting a backdrop where you’re seeing a more accommodative Fed and potential progress on trade.”
Also adding to optimism was a notice from U.S. officials granting Chinese exporters two more weeks to get their products to the United States before raising tariffs on those items.
But while U.S. President Donald Trump said there was a “good chance” of a U.S.-Mexico trade deal, if the two countries failed to make an agreement he plans to impose a 5 per cent tariff on Mexican imports on Monday.
“An interest rate cut is being priced into the market, but in order to go higher you do need to get progress on the trade front because in the longer term that is the bigger issue for markets,” said Larry Adam, chief investment officer at Raymond James in Baltimore, Maryland.
Technology stocks, among the hardest hit due to the recent escalation in trade tensions, rose 2 per cent and provided the biggest boost.
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The sector was lifted by gains in Apple Inc, Microsoft Corp, Mastercard and Visa. Chipmakers, which get a major portion of their revenue from China, also gained, with the Philadelphia chip index rising 1 per cent. Tariff-sensitive industrials rose 1 per cent with Boeing Co its biggest boost. Caterpillar Inc rose about 1 per cent.
Interest-rate sensitive bank stocks dropped 0.9 per cent. The broader financial index dipped 0.07 per cent and utilities fell 0.3 per cent – the only major S&P sectors in the red.
Beyond Meat Inc shares surged nearly 40 per cent after the maker of plant-based burgers said it expects to more than double its revenue and report breakeven EBITDA this year.
Advancing issues outnumbered declining ones on the NYSE by a 3.41-to-1 ratio; on Nasdaq, a 1.98-to-1 ratio favored advancers.
The S&P 500 posted 116 new 52-week highs and no new lows; the Nasdaq Composite recorded 98 new highs and 93 new lows.
With files from Reuters and The Canadian Press
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