Market drops as U.s. growth slows

The Toronto stock market closed lower Friday as steep declines in the energy, gold and metals sectors took back some of the gains seen earlier in the week, while data showed the U.S. economy was weaker than expected in the first quarter.

The S&P/TSX composite index dropped 109.31 points to 12,220.20 as the U.S. government reported that gross domestic product grew at an annualized rate of 2.5% in the first quarter. Economists had expected growth of 3%. The loonie was up US0.38¢ at US98.34¢. New York markets were mixed as the Dow Jones industrial average rose 11.75 points to 14,712.55. The Nasdaq lost 10.73 points to 3,279.26 and the S&P 500 was down 2.92 at 1,582.24. The TSX Venture up 0.55 of a point to 965.22.

Despite coming in below expectations, U.S. GDP growth for the first three months of 2013 was still much better than the 0.4% reported in the final quarter of 2012.

Officials said much of the gain was from a jump in consumer spending, which rose at an annual rate of 3.2% — the largest increase since the end of 2010. Government spending fell at a 4.1% annual rate, led by another deep cut in defence spending.

Economists forecast that the U.S. GDP will continue to slow in the April-to-June quarter to a rate of just 2% growth, and stay at that level for the rest of the year.

Oil and metal had risen sharply over the previous two sessions amid data showing U.S. oil inventories growing less than expected last week, a report from Goldman Sachs predicting a rebound in copper prices and hopes that the European Central Bank will cut interest rates next Thursday to boost the Continent’s economy.

The majority of sectors on the Toronto exchange were down, led by steep declines in base metals, gold and energy as weak GDP figures depressed commodity prices.

Metals and mining saw the largest decrease, with a 4.53% drop as May copper moved five cents to US$3.18 a pound.

Teck Resources fell 78¢ to $26.30. The gold sector fell 3.74% as June bullion closed down $8.20 to US$1,453.60 an ounce, but still a big improvement after plunging last week to US$1,361 an ounce, its lowest level in more than two years. Barrick Gold faded 66¢ to $18.80. Gold miner Agnico-Eagle Mines Ltd. reported that it earned US$23.9 million, or 14¢ per share in the latest quarter, down from $78.5 million, or 46¢ per share a year ago. Revenue for the quarter totalled $423.2 million, down from $474.1 million. Its shares were down $1.80 to $31.85.

The energy sector slipped 1.14% while the June crude contract fell 64¢ to $93 a barrel. Canadian Natural Resources gave back 62¢ to $29.58.