MIXED SIGNALS KEEP MARKETS CHOPPY
The Toronto stock market closed higher Thursday, led by advances in mining stocks that have sold off this week amid signs of slowing economic growth around the world.
The S&P/TSX composite index gained 49.05 points to 11,996.34 after sinking to a five-month low Wednesday while the Canadian dollar gained US0.06¢ to US97.47¢.
U.S. indexes were lower following sharp losses Wednesday as traders balanced a disappointing earnings report from investment bank Morgan Stanley, a positive read on the number of Americans seeking unemployment benefits last week and a key manufacturing index that didn’t meet forecasts.
The number of Americans seeking unemployment benefits increased just 4,000 last week to a seasonally adjusted 352,000. The slight gain kept applications at a level consistent with solid hiring and suggested that March’s sluggish hiring may have been temporary.
But the Federal Reserve’s Philadelphia Fed index dropped to 1.3 in April from two in March. Economists had expected the manufacturing gauge to rise to four.
The Dow Jones industrial average was 81.45 points lower at 14,537.14.
The Nasdaq composite index fell 38.31 points to 3,166.36 and the S&P 500 index was down 10.4 points to 1,541.61, falling below its 50-day moving average of 1,543.
It has been a very choppy week on the TSX, which sustained triple-digit slides Monday and Wednesday. Losses were led by steep drops in mining stocks as commodity prices retreated after the International Monetary Fund cut its forecast for global growth to 3.3% this year from its forecast in January of 3.5%.
The IMF data deepened pessimism about the strength of the global recovery as data released earlier in the week had shown growth in China slowing earlier this year and left the TSX down about 3.5% year to date.
New York indexes have also had a volatile week and are off the highs of the year reached at the end of last week, when the Dow was up 13.43% year to date.
Commodity prices were higher Thursday. The gold sector was the biggest advancer, up about 2.8% as the June contract gained $9.80 to US$1,392.00 an ounce. A rising U.S. dollar and the prospect of troubled eurozone countries selling off part of their gold reserves to tackle debt problems have sent gold to its lowest levels in more than two years. Goldcorp Inc. gained 63¢ to $28.58. Barrick Gold shares added 27¢ to $18.44 even after Moody’s Investors Service placed the miner under review for a potential ratings downgrade.