The Canadian Press

The Toronto stock market registered a modest advance Monday after commodity prices got a lift from reports showing solid U.S. employment growth and continued expansion of the service sector.

The S&P/TSX composite index closed up 35.29 points to 12,186.35. The TSX Venture Exchange was up 28.92 points at 1,631.46.

The U.S. Labour Department reported Friday that employers added 162,000 jobs in March. It was the biggest month-to-month employment gain for Americans since December 2007 and investors were particularly relieved that 123,000 of those jobs were in the private sector.

The U.S. jobless rate stayed steady at 9.7% “but it is still very, very high,” said John Kinsey, portfolio manager at Caldwell Securities, which means that any interest rate hike by the Federal Reserve is likely a long way away.

“As long as unemployment is over 9% … it’ll be very, very hard to raise interest rates. We think that it will be a while, certainly the second half before you see that happen in the U.S.”

Monday was the first opportunity for traders to react to the employment news as the data was released when markets in North America and many other areas were closed for the Good Friday holiday.

Other data showed the American service sector, which accounts for 80% of non-farm jobs in the U.S., grew at a faster than expected pace in March. The Institute for Supply Management’s service index grew to 55.4 last month from 53 in February, which was better than the 54 reading economists had expected.

Oil prices rose above US$86 a barrel Monday, extending a gain of almost US$5 from last week as investors bet an improving U.S. job market will encourage growing crude demand. The TSX energy sector rose 1.85% as the May crude contract on the New York Mercantile Exchange advanced $1.75 to US$86.62 a barrel. Suncor Energy (TSX:SU) gained 90 cents to C$35.22 while Canadian Natural Resources (TSX:CNQ) improved $1.66 to C$79.89.

May copper added five cents to US$3.63 a pound, taking the base metals sector up 1.09%. Teck Resources (TSX:TCK.B) advanced 80 cents to C$46.20 and Labrador Iron Mines Holdings (TSX:LIM) gained 39 cents to C$7.52.

Gold stocks were also higher as the June gold contract on the Nymex rose $7.70 to US$1,133.80 an ounce. Kinross Gold Corp. (TSX:YRI) was ahead 15 cents at C$7.89.

Outside the commodity sectors, TSX performance was held back by the financial component, down 0.69% as TD Bank (TSX:TD) shed $1.19 to $73.91 while CIBC (TSX:CM) was down $1.22 to $73.45.

Tech sector heavyweight Research In Motion Ltd. (TSX:RIM) was also a drag, down $1.19 to $67.86. The stock has lost ground after handing in a disappointing earnings report last Wednesday.

Higher commodity prices helped push the Canadian dollar further towards parity with the U.S. dollar Monday.

The currency closed up 0.55 of a cent to 99.72 cents US after strong economic data and surging commodity prices had pushed the loonie up about 1.75 cents US last week. The loonie hasn’t been at parity since July 17, 2008, when it briefly moved above a full U.S. dollar during intraday trading.

Economists say the loonie could get a shove towards parity with the greenback at the end of the week when the Canadian employment report for March is released.

“If we see another strong, solid jobs report for Canada next Friday, we could definitely see the impetus for the Canadian dollar going through parity,” said Jennifer Lee, senior economist at BMO Capital Markets.

New York markets were also lifted by another report showing that the number of American buyers who agreed to purchase previously occupied homes rose sharply in February. The National Association of Realtors said Monday its seasonally adjusted index of sales agreements rose 8.2% from January to a February reading of 97.6, which far exceeded expectations.

In New York, the Dow Jones industrial average climbed 46.48 points to 10,973.55. The Nasdaq composite index gained 26.95 points to 2,429.53 while the S&P 500 index moved 9.34 points higher to 1,187.44.

In corporate news, Magna Seating, an operating group of Canadian auto parts giant Magna International Inc. (TSX:MG.A), and U.S.-based supply manager Hollingsworth Logistics, have formed a joint venture to supply German carmaker Volkswagen with seat systems for its new car line. Financial terms of the partnership were not disclosed. Magna shares eased 18 cents to $63.19.