TSX down, Chinese data disappoints
The Toronto stock market closed lower Friday as mining stocks lost ground amid disappointing data from China.
The S&P/TSX composite index declined 45.34 points to 13,548.85 as traders also looked ahead to the start of the U.S. fourth-quarter earnings season next week.
The Canadian dollar rose 0.3 of a cent (U.S.) to 93.99 cents.
New York indexes were mixed amid bullish comments on the American economy from outgoing Federal Reserve chair Ben Bernanke.
Bernanke says Americans’ finances have improved and the outlook for home sales is brighter. He also expects less drag from federal spending cuts and tax increases. Combined, those factors bode well for U.S. economic growth in coming quarters.
The Dow Jones industrials rose 28.64 points to 16,469.99, the Nasdaq dipped 11.16 points to 4,131.91 while the S&P 500 index edged 0.61 of a point lower to 1,831.37.
The coming weeks will see earnings reports from heavyweights including resource company Alcoa and financial giants American Express, JPMorgan Chase and Wells Fargo.
Bloomberg News says that earnings are expected to rise just 3.7 per cent in the fourth quarter, excluding financial companies.
Hopes are high that strong earnings can support the huge run-up on U.S. markets last year, particularly after the Fed signalled last month that it is winding down a key area of stimulus. The U.S. Federal Reserve ended months of speculation last month and announced it would be cutting back on its $85 billion of monthly bond purchases. Meanwhile, base metal prices backed off as China’s official non-manufacturing Purchasing Managers’ Index fell to a fourmonth low, coming in at 54.6 in December from 56 in November. A reading above 50 indicates expansion. China is the world’s second-biggest economy and its double-digit growth of the past and huge appetite for commodities had been a huge plus for a resource-based market such as the TSX. But traders have had to get used to a more modest growth rate of between 7 and 7.5 per cent as the Chinese government keeps the lid on growth in order to keep inflation under control. The base metals sector was down1.4 per cent as March copper on the New York Mercantile Exchange lost three cents to $3.35 a pound. Capstone Mining shed eight cents to $2.92 (Canadian) while Teck Resources lost 69 cents to $26.89. The gold sector gave up early gains to post a loss of about one per cent as February bullion gained $13.40 (U.S.) to $1,238.60 an ounce. Goldcorp faded 42 cents (Canadian) to $23.71. Energy stocks also weighed on the TSX as crude fell 6 per cent this past week due to growing inventories in the U.S. and an expected recovery in Libyan production.