North American stocks ignored an upbeat reading on U.S. jobless claims, extending a losing streak as the outlook over the second quarter earnings season continues to deteriorate.
At noon, the Dow Jones industrial average was down 42 points or 0.3 per cent, to 12,562. The broader S&P 500 was down 9 points or 0.7 per cent, to 1332 – putting the index on track for its sixth consecutive decline. In Canada, the S&P/TSX composite index was down 141 points or 1.2 per cent, to 11,404.
The declines coincide with one of the few bright economic reports in recent weeks: U.S. initial jobless claims for the period ended last week fell to 350,000, marking the lowest level since 2008. Yet, economists were quick to point out that the decline is likely due to technical quirk, and not necessarily reflecting an improvement in the employment landscape.
Meanwhile, the second quarter earnings season remains a big weight on the stock market, following a number of disappointing reports so far and a number of slashed estimates from managers and analysts.
On Wednesday, the Federal Reserve released the minutes from its last monetary policy meeting, in June, leading to some concern among investors that the central bank is not yet close enough to providing aggressive stimulus to give the economy a boost.
In Europe, stocks also declined: Germany’s DAX index fell 0.5 per cent and the U.K.’s FTSE 100 fell 1 per cent.
Commodites also slipped. Crude oil fell to $85.18 (U.S.) a barrel, down 63 cents. Gold fell to $1,565 an ounce, down $11.
Within the S&P 500, economically sensitive areas took the hardest hits. Technology stocks fell 1.2 per cent, while materials and financials fell 1 per cent each. Defensive stocks held up better, with health care stocks, consumer staples and utilities showing slight gains.
Within Canada’s benchmark index, commodity producers were the biggest drags on performance. Materials fell 2.2 per cent and energy stocks fell 1.4 per cent. As well, financials fell 0.8 per cent.