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At midday: TSX up on positive U.S. jobs data, further deal-making

Trader Timothy Nick works on the floor of the New York Stock Exchange September 5, 2013.


The Toronto stock market was higher late morning Thursday amid corporate dealmaking and some positive American employment news.

The S&P/TSX composite index rose 56.91 points to 12,814.72.

U.S. private equity firm Directional Aviation Capital is buying Bombardier's Flexjet fractional business aircraft ownership service for $185-million (U.S.). The new owners are also ordering up to 245 Bombardier aircraft in a deal whose value could reach about $5.2-billion.

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Bombardier was ahead 11 cents to C$4.83.

The Canadian dollar lost early traction to move down 0.17 of a cent to 95.14 cents (U.S.).

U.S. indexes chalked up small gains as traders digested positive jobs data a day before the U.S. Labor Department's release of American employment data for August.

The Dow Jones industrials gained 9.63 points to 14,940.5 as payroll firm ADP reported that the American private sector created 176,000 jobs last month.

Economists believe that the government report will show the U.S. economy cranked a total of about 180,000 jobs in August.

"The headline number could easily come in better but when you drill down, the quality of the number won't be quite as good, possibly and then you'll say, 'OK, it's better but we see what is going on here," said Wes Mills, chief investment officer Scotia Asset Management.

"Everyone is going to focus on the full-time versus part-time because the Obama (health) care plan has been encouraging people to lay off full-time (workers) and hire more part time."

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Also, the number of Americans seeking unemployment benefits dropped 9,000 last week to a seasonally adjusted 323,000, near the lowest level since June 2008.

Other data showed rising expansion in the U.S. service sector as sales and orders grew and employers ramped up hiring.

The Institute for Supply Management said Thursday that its service-sector index rose to 58.6 in August from 56 in July, it's highest point since December 2005.

A measure of hiring in the index rose to 57, the most in six months.

The Nasdaq gained 7.59 points to 3,656.53 and the S&P 500 index climbed 2.74 points 1,655.82.

The jobs numbers out Friday may determine if or how much the U.S. Federal Reserve pulls back on the asset purchases that have kept long-term rates low and supported a rally on many stock markets this year.

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Markets have been preoccupied this week with the prospect of the U.S. leading a military strike against the regime of Syrian President Bashar Assad, which it accuses of using deadly sarin gas against civilians. President Barack Obama is seeking U.S. congressional approval for such a strike and a vote could come as soon as next week.

BlackBerry was another TSX driver, up 35 cents to $11.63 after the Wall Street Journal reported that the smartphone maker had narrowed the list of possible bidders for all or part of the company, and hopes to wrap up the auction by November.

Financials were the biggest TSX gainer, up one per cent as Royal Bank advanced $1.06 to $66.54.

Oil prices rose after new U.S. indicators underlined a modest recovery in the world's biggest economy.

October crude on the New York Mercantile Exchange ahead 67 cents to $107.90 (U.S.) a barrel and the energy sector gained 0.6 per cent. Imperial Oil was ahead 53 cents to $45.15 (Canadian).

A jump in U.S. auto sales helped brighten the outlook for oil consumption. And the Federal Reserve also said Wednesday that surveys showed moderate growth throughout the country.

Other commodities were lower as December copper dropped a penny to $3.23 (U.S.) a pound. The base metals sector rose 0.4 per cent and Turquoise Hill Resources was 12 cents higher at $5.49 (Canadian).

Gold stocks were the biggest TSX weight, down two per cent as December bullion declined $20.60 to $1,369.40 (U.S.) an ounce. Goldcorp was down 53 cents to $30.97 (Canadian).

A U.S. hedge fund is making a renewed call for changes at Barrick Gold, calling for the breakup of the company and the addition of a mining engineer and geologist to its board. Mike Morris, principal and founder of Two Fish Management, says that there is no compelling reason for Barrick to own a worldwide conglomerate of gold mines. Barrick edged 36 cents lower to $20.04.

Elsewhere on the corporate front, U.S. forestry giant Louisiana-Pacific Corp. plans to buy Vancouver-based Ainsworth Lumber Co. Ltd. for $1.1-billion (U.S.). Louisiana-Pacific will pay $3.76 (Canadian) per share. Ainsworth shares jumped 96 cents or 32.65 per cent to $3.90.

European bourses advanced as London's FTSE 100 index gained 0.73 per cent, the Paris CAC 40 was up 0.47 per cent while Frankfurt's DAX added 0.35 per cent.

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