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Mining stocks help push Toronto stock market higher as 2013 trading winds down

Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was higher Tuesday as investors prepared to close the books on a year that saw a solid advance on the TSX.

The S&P/TSX composite index climbed 41.24 points to 13,622.63 with gains led by the battered gold sector, by far the biggest loser on the Toronto market for this year.

The Canadian dollar closed up 0.04 of a cent to 94.02 cents US.

U.S. indexes were higher as traders digested a mixed bag of data on home prices, consumer confidence and manufacturing.

The Dow Jones industrials rose 29.35 points to 16,533.64, the Nasdaq was ahead 14.21 points to 4,168.41 while the S&P 500 index was up 2.91 points to 1,843.98.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 0.2 per cent from September to October, down from a 0.7 per cent increase from August to September, as higher mortgage rates weighed on sales and dampened the housing recovery.

For the year, U.S. home prices reflect big gains in earlier months. They have risen 13.6 per cent over the past 12 months, the fastest since February 2006 — before the U.S. real estate crash.

Other data showed the Chicago Purchasing Managers Index, a key reading on manufacturing in the American Midwest, slowed during this month, falling to 59.1 from 63.

Also, the U.S. Conference Board said its consumer confidence index for December came in 78.1, up sharply from 72 in November.

The TSX looked set to end 2013 trading with a solid gain of almost 10 per cent, with the advance racked up just over the last five months.

"The back half of the year was really the inflection point," said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.

He observed that was the point where the market started to transition from one that was liquidity driven thanks to central bank stimulus to an environment where investors started to focus more on economic fundamentals.

"And that’s a healthy transition," added Fehr.

TSX gains would have been greater if not for deep losses in the mining sectors. The gold sector is down almost 50 per cent for the year while the metal sector has fallen about 28 per cent, the first annual loss since 2000.

Gold prices have taken a big hit this year as the global economy gradually improved and the U.S. Federal Reserve made moves to cut back on a key area of stimulus, its monthly bond purchases.

In addition to the big losses in gold, the base metals component has retreated 22 per cent as an uneven global recovery kept the lid on commodity prices.

Outside of the mining sectors, most TSX sectors did quite well for the year.

"Roughly half of the TSX sectors are up double digits or more for the year," said Fehr.

"And when you look at industrials, consumer discretionary, there are some very strong gains and I think the investments that were really tied to fundamental growth, better manufacturing, consumer spending around the world, those are areas that did exceptionally well."

Financials were up 22 per cent for the year. Insurers have been particularly strong performers as companies benefitted from strong stock market gains and rising bond yields.

Industrials had a good year, up about 35 per cent as railroad stocks shot ahead, helped along in large part by rising shipments of crude oil. Fresh questions about rail transport safety for crude will be asked after a 1.6-kilometre-long train carrying crude oil derailed outside of the town of Casselton, North Dakota on Monday. BNSF Railway Co. said it believes about 20 cars caught fire after its oil train left the tracks Monday afternoon.

The consumer discretion sector jumped almost 40 per cent. Many stocks almost doubled over the past 52 weeks, including auto parts makers Magna International (TSX:MG), Linamar Corp. (TSX:LNR) and Martinrea International (TSX:MRE).

In sharp contrast, the Dow industrials has plowed ahead about 26 per cent.

On Tuesday, the gold sector was the major advancer, up 1.9 per cent while the February contract on the Nymex shed early losses to move up $1.50 to US$1,202.30 an ounce. Barrick Gold (TSX:ABX) climbed 46 cents to C$18.66.

The TSX energy sector was ahead 0.6 per cent and is up about 9.5 per cent for the year. The February crude contract on the New York Mercantile Exchange closed 87 cents lower to US$98.42 a barrel. Canadian Natural Resources (TSX:CNQ) advanced 42 cents to C$36.

The base metals group was also ahead 0.6 per cent with March copper up a penny at US$3.40 a pound. HudBay Minerals (TSX:HBM) was ahead 22 cents to C$8.87.

All TSX sectors were positive save for a slight dip in the tech sector. But BlackBerry (TSX:BB) gained 16 cents to $7.88, a long way from its 52-week high of $18.49. Prices started to plummet mid-year when it became apparent its new lineup of smartphones had widely missed expectations.