Even rosier-than-expected U.S. jobs data can't boost markets
The TSX broadcast centre is seen in this Toronto file photo. (Aaron Harris/THE CANADIAN PRESS)
Published Friday, November 2, 2012 9:57AM EDT
Last Updated Friday, November 2, 2012 1:21PM EDT
TORONTO -- Stock markets failed to find lift Friday from data that suggested the American economic recovery is on track as nervousness about the outcome of the U.S. election trumped a better than expected jobs report.
The S&P/TSX composite index was down 72.65 points at 12,427.1, while other data showed Canadian job growth slowed more than anticipated. The TSX Venture Exchange slipped 9.15 points to 1,312.14.
The Canadian dollar was up 0.13 of a cent to 100.45 cents US as Statistics Canada reported that the economy added just 1,800 jobs last month while the unemployment rate remained unchanged at 7.4 per cent.
New York indexes also fell after the U.S. Labour Department said the American economy cranked out 170,000 jobs in October, higher than the 125,000 that had been expected. Still, the U.S. unemployment rate inched up 0.1 of a point to 7.9 per cent.
The U.S. numbers for August and September were also revised upward to show an additional 84,000 jobs had been created.
The Dow Jones industrials lost 52.5 points to 13,180.12, the Nasdaq fell 8.6 points to 3,011.46 and the S&P 500 index shed 3.08 points to 1,424.51.
Analysts suggested that worries about the outcome of Tuesday's presidential U.S. election left buyers disinclined to do much in the wake of the jobs report.
"That's still up for grabs," said Colin Cieszynski, market analyst at CMC Markets Canada, who noted that there are also worries that there may not be a clear-cut winner the morning after the vote.
"That's a bigger concern at this point because that sends everything into disarray right when you have that whole fiscal cliff going on too. That's all you need, is to have nobody in charge."
The "fiscal cliff" refers to a variety of tax hikes and massive budget reductions that will come into effect at the end of December unless Republicans and Democrats can come together with an alternative budget plan. Economists warn such a shock could send the economy back into recession.
TSX losses were led by falling gold stocks as the strong U.S. jobs numbers depressed bullion prices. The gold sector was down almost three per cent as December bullion faded $31.10 to US$1,684.50 an ounce. Goldcorp Inc. (TSX:G) gave back $1.45 to C$43.73 while Barrick Gold Corp. (TSX:ABX) lost 76 cents to $35.80.
The American currency moved higher against most currencies and that also helped depress commodity prices.
The energy sector was off one per cent with the December crude contract on the New York Mercantile Exchange down $1.47 at US$85.62 a barrel. Canadian Natural Resources (TSX:CNQ) declined 47 cents to C$29.85 while Cenovus Energy (TSX:CVE) fell 49 cents to $35.09.
The base metals sector was the biggest advancer, up 0.5 per cent even as December copper was five cents lower at US$3.50 a pound. First Quantum Minerals (TSX:FM) gained 38 cents to C$24.07.
Shares in Inmet Mining Corp. (TSX:IMN) were up $2.94 to $55.55 as it reported that third-quarter net income grew 19 per cent to $116.2 million as copper production and prices improved. Sales grew 29 per cent to $327.2 million compared with $253.4 million in the year-ago period.
Industrials were also supportive as net income at construction and engineering company SNC-Lavalin Group Inc. (TSX:SNC) dropped to $114.9 million or 76 cents per diluted share, down from $127.6 million or 82 cents per share in the third quarter of 2011. Its revenue increased, however, to $1.98 billion from $1.78 billion.
The revenue was in line with expectations while SNC's profit didn't dip as much as anticipated and its shares gained $1.97 to $42.25.
In other corporate news, Hudson's Bay Co. says preliminary results suggest its third quarter revenues were up 3.8 per cent from the same time last year to $930.4 million but its margins were squeezed by shortages and seasonal clearance markdowns. The information was contained in a revised prospectus filed as part of HBC's plans to return to the public stock market.
Resolute Forest Products (TSX:RFP), the company formerly known as AbitibiBowater, earned net income of US$31 million or 32 cents per diluted share on sales of US$1.15 billion in the latest quarter. That compared with a net loss of US$44 million, or 46 cents per share, on sales of $1.22 billion in the third quarter of 2011. Its shares fell 45 cents to $12.05.
European markets were higher as the American jobs data took some of the sting from poor manufacturing figures for the 17-country eurozone.
The October purchasing managers index, a gauge of business activity, fell to 45.4 in October from 46.1 in September. Anything below 50 indicates a contraction in activity. Particularly worrying was that most of the euro countries are seeing their manufacturing sectors contract, including Germany and France.
Elsewhere in the eurozone, Greece looked shaky amid signs that the coalition government is fracturing ahead of a parliamentary vote next week on a C13.5-billion package of spending cuts and tax increases. The measures are required by international creditors in return for giving the country more bailout cash.
Prime Minister Antonis Samaras has said that Athens will start running out of money by the middle of the month.
London's FTSE 100 slipped 0.07 per cent, Frankfurt's DAX rose 0.29 per cent while the Paris CAC 40 was up 0.27 per cent.
Earlier in Asia, Japan's Nikkei 225 index advanced 1.2 per cent, Hong Kong's Hang Seng rose 1.3 per cent and South Korea's Kospi gained 1.1 per cent.