Source: The Canadian Press

Commodity stocks pushed the Toronto stock market to a sharply higher close Friday after a strong earnings report from the U.S. resource sector helped balance an underwhelming American jobs reading.

The S&P/TSX composite index rose 89.66 points to 12,535.59 after the U.S. Labour Department said that the overall American economy shed 95,000 jobs in September, against the 5,000 gain that had been expected. However, the U.S. unemployment rate was unchanged at 9.6%.

Government employment fell by 159,000 but private sector employment grew by 64,000.

In Canada, the domestic job machine also faltered in September, even as the jobless rate edged lower. Statistics Canada reported that the economy shed 6,600 jobs, against the addition of 10,000 that economists had been expecting.

The unemployment rate surprisingly dropped one-tenth of a point to 8%, but the agency said that only occurred because fewer people, particularly younger Canadians, were actively looking for work last month.

The TSX Venture Exchange climbed 19.12 points to 1,784.88.

The Canadian dollar rose 0.7 of a cent to 98.88 cents US.

Commodity stocks led TSX gains, helped along by a well-received earnings report from Alcoa, the largest U.S. aluminum company.

The resource giant reported third-quarter results slightly above Wall Street expectations after the market close Thursday. It expects global aluminum consumption to grow 13% this year, up from a forecast of 12% growth in the second quarter. Its shares were up 69 cents, or 5.66%, at US$12.89 in New York.

“They said demand from (emerging countries) is coming through quite strongly,” said Gavin Graham, global strategist at Excel Funds Management.

“So it’s fair to expect that you will see strength in earnings (from) companies which have an exposure to demand from emerging markets.”

The base metals group led gainers, up 2.9% as the December copper contract on the New York Mercantile Exchange rose nine cents to US$3.77 a pound. Teck Resources (TSX:TCK.B) rose $1.11 to C$45.01 while Western Coal Corp. (TSX:WTN) was up 11 cents at C$6.80.

The gold sector also made gains as bullion prices headed higher with the December gold contract on the Nymex up $10.30 at US$1,345.30 an ounce. Barrick Gold Corp. (TSX:ABX) climbed 57 cents to C$49.08.

The energy sector moved ahead 1.32% with the November crude contract on the Nymex ahead 99 cents at US$82.66 a barrel. Canadian Natural Resources (TSX:CNQ) rose 39 cents to C$37.97 and Suncor Energy (TSX:SU) advanced 96 cents to C$35.04.

Elsewhere in the resource sector, shares in PotashCorp of Saskatchewan (TSX:POT) ran up $4 to $147.50. Meanwhile, stock in another big fertilizer company, Agrium Inc. (TSX:AGU), hit a multi-year high, rising $5.43 or 7% to $82.12 after its friendly $1.1-billion takeover bid for Australia-based grain exporter AWB Ltd. got support from an independent investor advisory firm.

The tech sector was also higher after the United Arab Emirates backed off a threat to cut key services on BlackBerry smartphones, just days before the ban was set to take effect. The Gulf federation had been planning to shut off BlackBerry messaging, email and Web browsing services Monday over security concerns.

The Emirates telecommunications regulator confirmed that a deal had been reached with Research in Motion (TSX:RIM) that brought the devices into compliance with local laws. However, it isn’t clear what concessions, if any, the BlackBerry maker made to avert the ban. RIM shares gained $1.12 to $49.98.

Financials were the weakest TSX component as Manulife Financial (TSX:MFC) lost 18 cents to $12.41.

New York markets were also higher as the weak report on unemployment added to expectations that the Federal Reserve will step in to stimulate the U.S. economy by stepping up its purchases of government bonds.

“That’s exactly the reason in that bad news is good news from the point of view of the market, feeling the more likely it is that the Fed is going to bring out the big guns and start pumping more money into the market,” Excel’s Graham said.

The Dow Jones industrial average was up 57.9 points at 11,006.48, its highest close since May 3.

The Nasdaq composite index climbed 18.24 points to 2,401.91 and the S&P 500 index rose 7.09 points to 1,165.15.

TSX gained 1.39% this week as the rally that started in September continued. The Dow industrials rose 1.6% on the week.

Elsewhere on the corporate front, Jazz Air Income Fund (TSX:JAZ.UN) units ran ahead 38 cents, or 8.15%, to $5.04. It said Friday that it intends to continue making regular payments to its investors when it converts to a corporation, but instead of monthly distributions to unitholders it will pay quarterly dividends.

Jazz, which is changing its name to Chorus Aviation, said it expects to pay out the same amount per share annually as it does currently but investors will typically be able to keep more of the money after paying taxes.

Telecom equipment maker DragonWave Inc. (TSX:DWI) expects to increase its global customer base as the demand for mobile broadband Internet services continues to grow. Ottawa-based DragonWave made the comment as it reported sharply lower second-quarter earnings of US$1.2 million on Thursday. Its shares gained 25 cents to $7.04.

The Toronto stock market will be closed Monday for the Thanksgiving Day holiday.