TSX DROPS AS TRADERS LOOK TO JOBS DATA
TORONTO • The Toronto stock market closed lower on Thursday as attention shifted to key jobs figures that will offer more insight into the direction of both the Canadian and U.S. economies.
The S&P/TSX composite index lost 56.90 points to 14,402.21, on weakness across most major sectors.
The Canadian dollar was down US0.03 of a cent at US90.59¢.
Traders were focused on the U.S. economy ahead of the U.S. non-farm payrolls report due early Friday after the week was filled with encouraging signs of improvement.
On Thursday, the Institute for Supply Management’s non-manufacturing index rose to 53.1 in March, an indicator that the service sector is starting to see growth.
The U.S. Labor Department said hiring remains stable at levels seen before the recession, as the number of people seeking unemployment benefits rose by 16,000 last week, to a seasonally adjusted 326,000.
On Wall Street, the Dow Jones Industrials ended flat, down 0.45 of a point to 16,572.55 while the Nasdaq dropped 38.72 points to 4,237.74. The S&P 500 index fell 2.13 points to 1,888.77.
In commodities, June bullion dropped US$6.10 to US$1,284.40 an ounce, as investors moved away from the precious metal on signs of further growth in the U.S. economy.
The price of oil closed above US$100 a barrel with the May contract for light crude up US67¢ at US$100.29. May copper dipped US1.9¢ at US$3.027 a pound.
Economists expect that the latest American job creation figures will show that busi- nesses started hiring more workers in March as the bad winter weather subsided. Consensus expectations suggest that around 195,000 new positions were created, which would be a steady improvement from recent months.
In Canada, analysts expect about 25,000 jobs were added last month, which would be an improvement over the decline of 7,000 in February.
In other economic data, Statistics Canada reported that a rebound in exports pushed the country’s trade balance with the world to a surplus of $290-million in February from a deficit of $337-million in January.
Toronto’s main stock index has risen nearly 6% since the start of the year and sits near levels that haven’t been seen since the summer of 2008. However, questions have persisted over whether the S&P/TSX Composite is headed toward a ceiling.
“I’m one of those guys that’s very surprised how [well] the TSX did this first quarter,” said Sadiq Adatia, chief investment officer of Sun Life Global Investment.
Considering the outlook for the economy, and the most recent slate of earnings, the fundamentals of Canada’s main stock exchange don’t hold up, Adatia said.
“It’s just about a matter of time before we have a decent pullback in the TSX,” he added. “As more data comes out on the Canadian market, we’re going to realize the economy really is not that strong.”
Shares of Hudson’s Bay Co. dropped 5% after it reported the acquisition of U.S. luxury retailer Saks helped sales increase nearly 75% in the fourth quarter, while its profits dropped about 66%, to $29.1-million from $86.8-million a year ago. Its stock was off 96¢ to $17.86.