Hiring slowdown in U.S. spooks investors

TORONTO — Canadian and U.S. stocks racked up broad-based losses Thursday amid mounting evidence that U.S. hiring has slowed down.

The Toronto Stock Exchange’s S&P/TSX composite index was down 75.12 points to 15078.00 in a decline that saw nearly all sectors finish in the red.

In New York, the Dow Jones industrial average dropped 158.13 points to 21320.04, the S&P 500 index shed 22.79 points to 2409.75 and the Nasdaq composite index fell 61.40 points to 6089.46.

The losses came as payroll processor ADP reported that private U.S. businesses added 158,000 jobs last month, which was fewer than analysts expected.

“What we’re seeing is this general erosion in sentiment,” said Andrew Pyle, a senior wealth adviser at Scotia Wealth Management. “Some of that has to do with the weaker-than-expected payroll numbers we saw in the States this morning.”

Going into the summer, Pyle said, the fundamentals that have been behind the impressive movements of U.S. stock markets are starting to fade.

“Without proof that we’re going to see an acceleration in U.S. growth and global growth, investors are having a hard time justifying current levels of the market. And that’s why we’re seeing this general pullback.”

In currencies, the Canadian dollar was trading at an average price of 77.24 cents US, up 0.21 of a U.S. cent.

Pyle pegged the loonie’s recent rally to a switch in market sentiment with respect to the Bank of Canada, which next Wednesday will make its next interest-rate announcement. There have been growing expectations of a rate hike, which would be the first such increase in nearly seven years.

Gold, which tends to do well when the U.S. dollar is under pressure, was also up. The August gold contract advanced $1.60 to $1,223.30 US an ounce.

On the corporate front, Air Canada shares were at their highest in more than 10 years on Thursday after the country’s largest airline said analyst forecasts had significantly underestimated one of its earnings benchmarks.

The August crude-oil contract was up 39 cents to $45.52 US per barrel while the August natural gas contract added five cents to $2.89 US per mmBTU. The September copper contract was ahead two cents at $2.66 US a pound.