North American markets were slightly lower Friday following better-than-expected durable goods orders in April that suggested encouraging news for U.S. manufacturers.
The S&P/TSX composite index fell 3.57 points to 12,654.52.
On Wall Street, the Dow Jones industrials average dropped 55.87 points to 15,238.63, the Nasdaq lost 18.42 points to 3,441, while the S&P 500 dipped 9.21 points to 1,641.30.
The Canadian dollar was down 0.28 of a cent to 98.86 cents US.
The U.S. Commerce Department reported durable goods orders for April rose 3.3 per cent after a 5.9 per cent decline in March. Analysts had predicted a jump of only 1.5 per cent. The department says the figure was buoyed by more demand for military and civilian aircraft and an increase in business investment.
But the positive news was not enough to bounce back the markets, which fell a day earlier over unexpectedly weak Chinese manufacturing numbers and worries that the U.S. Federal Reserve will start withdrawing its monetary stimulus.
Jennifer Radman, a portfolio manager with Caldwell Investment Management, said it’s not surprising that the U.S. markets showed little positive reaction to durable goods figures.
“At this point, we’ve had such a strong run in the market... so I think a lot of people are expecting a downturn,” she said.
Radman said some stocks in her portfolios have risen up to 20 per cent in the past month and perhaps investors are now speculating more about how long those highs might be able to last.
“I think the markets sometimes use different news items as an excuse to take money off the table,” she said. “It might just be a bit of profit-taking. It sort of happens when the market has had such a strong run.”
Earlier this week, Fed chairman Ben Bernanke said the central does not plan on scaling back or ending its stimulus anytime soon, but will consider it as early as next September.
The Fed has been buying $85-billion worth of bonds every month as part of its stimulus program that has kept interest rates low and encouraged investors to put money into stocks and other risky assets. If the Fed slows down or ends its bond purchases, investors fear it could lead to a shift of money from stocks.
Meanwhile, the commodities market continued see modest declines and dragging down the resource-heavy TSX.
The July crude contract was down 89 cents to $93.36 (U.S.) a barrel, while June gold bullion lost $6.60 to $1,385.20 an ounce. July copper was down a penny at US$3.29 a pound.
Rising shares in Manitoba Telecom Services provided a lift to the Toronto stock market after they increased by 4.3 per cent, or $1.41 to $33.51.
Winnipeg-based MTS announced that it will be selling its national telecommunications arm, Allstream, to Accelero Capital Holdings in a deal worth $520-million.
Shares in National Bank also climbed by 1.71 per cent, or $1.29, to $76.85 after Canada’s sixth-largest bank said it was hiking its dividend and buying back some of its shares because its second-quarter profit beat analyst estimates by a wide margin.
Japan’s Nikkei 225 index, which plummeted more than 7 per cent Thursday, posted a big morning gain and then took investors on a dizzying ride into negative territory swinging more than 1,000 points between the day’s high and low before closing 0.9 per cent higher at 14,612.45 on Friday.
The Nikkei has been the best-performing major index this year, having risen around 45 per cent to five-year highs before Thursday’s drop. The index has been buoyed by aggressive monetary stimulus by the Bank of Japan, which has piled pressure on the yen.
In Europe, Britain’s FTSE 100 was nearly unchanged at 6,695.82. Germany’s DAX rose 0.3 per cent to 8,378.07. France’s CAC-40 gained 0.5 per cent to 3,988.59.