MARKETS SLIDE AMID SOUR U.S. JOBS OUTLOOK
• North American stock markets weakened on Friday as traders soured to the latest U.S. jobs figures, and the Nasdaq was hammered on falling technology stocks.
The S&P/TSX composite index closed 9.11 points lower to 14,393.10, while the Canadian dollar ended 0.48 of a cent higher at US91.07¢.
The declines were even steeper on Wall Street where investors took a mostly negative stance on the March jobs data, which they had hoped would show a steady recovery after emerging from an intense winter season.
The Dow Jones industrials slid 159.84 points to 16,412.71, and the S&P 500 index gave back 23.68 points to 1,865.09. The Nasdaq fell 2.6% to close at its lowest level in about two months, falling 110.01 points to 4,127.73.
Tech stocks were the major drag, as influential names such as Google, Facebook, Microsoft and Amazon all moved lower as growth momentum that’s played out in the sector this year started to lose steam.
Traders have been looking for reassurance that the U.S. economy is solid, but despite key economic data throughout the week that pointed to reasons for confidence, the indexes haven’t followed suit.
The U.S. Labor Department reported that American employers added 192,000 jobs in March, which fell slightly short of consensus predictions of about 195,000 and was lower than February. “The recovery is perhaps not as strong as one would hope, but the revisions to previous figures suggest that the overall results are quite positive all the same,” wrote Desjardins senior economist Francis Genereux in a note.
Overall, employment growth helped back up opinions of a recovery in the U.S. economy, but that sentiment was fuelled by a positive revision to numbers for January and February. The U.S. unemployment rate was unchanged at 6.7%.
The employment figures couldn’t shift perceptions about where the Federal Reserve is headed. During the past few months, the Fed has been reducing its monetary stimulus amid mounting evidence of a sustainable economic recovery in the U.S.
All in all, the U.S. jobs report provided “further evidence that the economy is rebounding from the chill of an unusually severe, stormy winter,” wrote CIBC World Markets senior economist Peter Buchanan in a note.
Domestic jobs data got a better reception, as Statistics Canada said 43,000 new jobs were added in March. The increase eased Canada’s unemployment rate down a tenth of a point to 6.9% — matching a postrecession low — but most of the gains were in part-time positions and the vast majority of the new jobs went to young Canadians. “I tend to not see that necessarily as a great sign for the Canadian economy,” said Kevin Headland, director of the portfolio advisory group at Manulife Asset Management.
As enthusiasm surrounding the U.S. economy subsided, gold prices moved higher. June bullion gained US$18.90 to US$1,303.20 an ounce, while May copper was relatively unchanged at US$3.02 a pound. And oil continued to trade above US$100 a barrel with May crude settling 85 cents higher to US$101.14 a barrel.