The Toronto stock market fell Friday, pulled down by Canadian jobs data that slightly missed expectations and a continuing retreat in commodity prices.
The S&P/TSX composite index was off 6.71 points to 12,537.19, while the Canadian dollar lost 0.59 of a cent to 98.67 U.S..
While the Statistics Canada unemployment figures weren’t a significant miss, Kevin Headland of Manulife Asset Management says they may signal a downward trend for the Canadian economy.
“If we start seeing continuously negative numbers come out on a trend basis in Canada, that’s a big overall risk to the Canadian economy,” said Headland, director of Manulife’s portfolio advisory group.
“When you think about the over-indebted consumer... the risk of the housing market, and if jobs creep in, and start becoming a risk, people will be less likely to spend when they’re worried about losing their jobs.”
In corporate news, shares in automobile parts manufacturing giant Magna International shot up nearly four per cent after it reported an increase in first-quarter net earnings and revenue despite a meagre increase in vehicle production in North America and a downturn in Europe.
Ontario-based Magna said net profits attributable to shareholders rose to $369-million (U.S.) or $1.57 per diluted share, up from $343-million or $1.46 per share. Revenue improved to $8.36-billion, up from $7.67-billion. Its stock was up $2.47 at $65.68.
The operator of Canada’s major stock exchanges, TMX Group Limited, reported a first-quarter net profit of $37.8-million or 70 cents per share as it brought in revenues of $172.2-million in the three months ended March 31. In the same 2012 period, the TMX lost $4.4-million, but the results were not comparable because of a change in ownership late last year and other changes. Traders reacted by driving down its shares by 2.81 per cent, or $1.49, to $51.45.
Wall Street resumed a recent rally after a hiatus on Thursday, putting it on track for a third straight week of gains. A pair of strong corporate earnings helped the Nasdaq register a small advance.
The Dow Jones industrial index off 29.82 points to 15,052.80, while the S&P 500 dipped 1.53 points to 1,625.14 and the Nasdaq climbed 4.63 points to 3,413.80.
Nvidia Corp. and Priceline.com Inc. led the Nasdaq’s rise a day after their results. Both companies beat profit expectations, even as Priceline gave a second-quarter outlook that disappointed.
“We’re getting more constructive on the second half of the year as both the market and the economy are picking up,” said Terry DuFrene, investment specialist for JP Morgan Private Bank in New Orleans.
“While it has caught us by surprise how much markets have come up, and we might see a decline of 5 per cent, we don’t see any meaningful pullback ahead,” DuFrene said.
Overseas, G7 finance ministers and central bankers were also beginning a two-day meeting in the U.K., which Bernanke was not expected to attend.
The bankers will likely discuss monetary policy and how to shore up the global recovery just as the stimulus policy of one its members, Japan, has caused its currency to extend its slide against the dollar.
Japanese stocks enjoyed another big advance after the U.S. dollar finally broke through the 100 yen mark following several failed attempts. The Nikkei 225 index in Tokyo jumped 2.9 per cent to close at 14,607.54, its highest level since January 2008.
Elsewhere in Asia, South Korea’s Kospi plummeted 1.8 per cent to 1,944.75 amid jitters over competition with Japan, whose weakened currency puts South Korean exporters at a disadvantage. Hong Kong’s Hang Seng gained 0.5 per cent to 23,321.22.
European shares scaled fresh five-year highs on Friday, led by healthcare group Novartis and telecoms firm BT on positive corporate news, and traders said key indexes had scope for more gains.
The pan-European FTSEurofirst 300 index provisionally closed up 0.3 per cent at 1,232.44 points, its highest level since mid-2008 and rising more than 1 per cent this week.
The euro zone’s blue-chip Euro STOXX 50 index rose 0.3 per cent to 2,781.58 points, while Germany’s benchmark DAX equity index set a new record intraday high of 8,358.23 points.
Some analysts said the market was getting vulnerable to a pull-back after the recent sharp gains, but the overall trend remained positive.
“People are going to lock some profits in at the end of a good up-week, but you’ve still got to buy the dips. I can’t see anything to make it go off by too much,” said Darren Courtney-Cook, head of trading at Central Markets Investment Management.
With files from Reuters