TSX falls as more U.S. jobs lost
The Toronto stock market closed lower today and racked up its second weekly loss in a row as a string of disappointing economic data was capped by a U.S. jobs report that widely missed expectations. Collectively, the data have raised even more doubts that the surge in stocks since early March can be sustained.
The S&P/TSX composite index lost 113.43 points to 10,958.33 after the U.S. Labour Department reported that job losses came in at 263,000.
That was far more than the approximately 180,000 lost jobs that economists expected. The U.S. unemployment rate increased a tenth of a point to 9.8 per cent, the highest level since June, 1983.
"There's been a lot of talk, particularly in the last couple of months, that we're seeing a turnaround in unemployment, and obviously that's not the case," said Dan Cook, senior market analyst at IG Markets in Chicago.
The main TSX index fell 254 points or 2.26 per cent this week in the wake of a report showing Canadian economic growth flat at mid-summer, along with disappointing U.S. manufacturing and consumer sentiment reports.
Hopes for a strong rebound have fuelled the strong rise in markets this year. The TSX's main index surged almost 10 per cent in the third quarter alone.
The Canadian dollar headed higher, rising 0.17 of a cent to 92.38 cents US.
The financial sector was the leading decliner, down almost two per cent. Scotiabank (TSX: BNS) fell $1.93 to $46.10.
TD Bank (TSX: TD) shares were down $1.53 to $65.17 after it said it will reimburse customers who incur fees because of computer problems at a U.S. subsidiary that have delayed transaction postings all week.
The bank said the problems came about as it integrated the computer systems of the old TD Banknorth and Commerce Bank, which TD acquired last year.
The energy sector also pulled down the TSX, falling 1.17 per cent as the November crude contract on the New York Mercantile Exchange slipped 87 cents to US$69.95 a barrel. Canadian Natural Resources (TSX: CNQ) lost $1.39 to $68.42.
The TSX Venture Exchange slipped 4.59 points to 1,244.12.
U.S. markets closed lower as the Dow Jones industrial fell 21.61 points to 9,487.67, losing 177.52 points or 1.83 per cent this week. The Nasdaq composite index edged 9.37 points lower to 2,048.11, while the S&P 500 index was off 4.64 points to 1,025.21.
In yet another dose of tepid economic data, the U.S. Commerce Department reported that new orders to U payday loans.S. factories fell in August by 0.8 per cent, the largest amount in five months. Economists had expected a gain of 0.7 per cent.
The TSX industrials sector moved down almost one per cent. Bombardier Inc. (TSX: BBD.B) declined 12 cents to $4.76.
Magellan Aerospace Corp. (TSX: MAL) said Thursday that it has signed a deal to build components for Airbus' new A350 XWB aircraft. Financial terms of the deal were not immediately available. It stock moved 10 cents lower to $1.43.
The base metals sector dipped 0.39 per cent while December copper moved down 5.5 cents to US$2.68 a pound. But HudBay Minerals (TSX: HBM) gained 60 cents to $12.90.
The gold sector was flat as the December bullion contract on the Nymex shook off early losses to advance $3.60 to US$1,004.30.
In other corporate news, the Globe and Mail reported that National Post chief executive Paul Godfrey had lined up financial backers to make a bid for daily newspapers owned by CanWest Global Communications Corp. (TSX: CGS). Canwest stock surged 6.5 cents or 31.7 per cent to 27 cents even as CanWest said its papers are not for sale.
Canwest has been trying for months to sell assets in order to free itself from a huge debt load, largely taken on to acquire the former Southam newspapers from a company controlled by former media baron Conrad Black.
Pengrowth Energy Trust (TSX: PGF.UN) units fell 74 cents to $10.28 after announcing it would cut its monthly distributions to unitholders by 30 per cent, starting with its November payment, to help fund an increase in capital spending.
QLT Inc. (TSX: QLT) shares rose 34 cents or 8.83 per cent to $4.19 after it said Thursday that it has sold its U.S. subsidiary QLT USA Inc. to Tolmar Holding Inc. in a deal worth up to US$230 million. QLT USA's principal asset is the Eligard line of products for the treatment of prostate cancer.
Oncolytics Biotech Inc. (TSX: ONC) has approval to conduct a Phase 3 trial of a treatment for head and neck cancers using the company's Reolysin drug in combination with chemotherapy. The news sent its stock surging 53 cents or 16.67 per cent to $3.71.
Enbridge Inc. (TSX: ENB) shares were 15 cents lower to $40.76 after signing a deal to acquire a 20-megawatt solar energy project near Sarnia, Ont., being built by First Solar Inc. (Nasdaq: FSLR).
Filed under: economics by TheDoor