The Toronto stock market was lower for a third day ahead of the holiday weekend despite data showing solid job creation in Canada last month.
The S&P/TSX composite index was down 24.29 points to 12,154.37 as a disappointing Spanish government bond auction put the European debt crisis back on centre stage.
Statistics Canada reported that the economy created 82,000 jobs in March, far higher than the approximately 10,000 jobs that economists had expected.
Also, the jobless rate fell to 7.2 per cent from 7.4 per cent in February.
The Canadian dollar was up 0.51 of a cent to 100.87 cents US following the jobs data.
The TSX Venture Exchange fell 10.13 points to 1,489.01.
U.S. markets were generally little changed as traders reduced their exposure ahead of the U.S. non-farm payrolls report for March, which is being released Good Friday morning when markets will be closed.
“There's just not a lot of people that want to take a lot of risk at this point,” said Mark Bayko, portfolio adviser, U.S. and International Equities at RBC Dominion Securities.
“A lot of people are happy to stay on the sidelines and see what happens over the next few days.”
Economists expect job creation to come in around 210,000, which would be the fourth month in a row that the economy has turned out more than 200,000 jobs.
Ahead of that data, the U.S. Labour Department reported Thursday that the number of people seeking U.S. unemployment benefits fell to a four-year low last week.
Weekly applications dropped 6,000 to a seasonally adjusted 357,000, the fewest since April 2008.
The Dow Jones industrials gained 10.41 points to 13,085.16.
The Nasdaq composite index was up 11.73 points to 3,079.82 and the S&P 500 index added 2.43 points to 1,401.39.
The TSX registered a steep, triple-digit loss on Wednesday after Spain's bond yields advanced in the wake of a disappointing set of bond auctions.
Spain has become the latest point of concern in Europe's debt crisis as investors are concerned over the ability of the government to push through its big austerity program at a time when its economy is heading for a return to recession and unemployment is running at around 23 per cent. The yield on the country's 10-year bond pushed up a further 0.07 percentage point to 5.73 per cent Thursday.
Countries such as Italy and Spain were faced with sharply higher bond yields late last year as investors lacked confidence in their governments to cut deficits and demanded higher premiums for rolling over debt.
The problem receded in December after the European Central Bank made large amounts of money available to eurozone banks at very low interest rates, which in turn was used to buy up government bonds in a program known as long-term refinancing operations (LTROs).
“During that time frame, a lot of the debt auctions were going reasonably well and you saw yields starting to come down as there was clearly enough demand for government debt and all signs were pointing in the right direction,” Bayko said.
However, the LTRO facility expired at the end of March.
The Spanish bond auction was “one of the first major auctions post the ECB's LTRO and it didn't go very well,” he said.
“All of a sudden now, the concerns are creeping back in on the European front.”
Europe has weighed on markets for most of this week after purchasing managers data indicated the eurozone is facing recession.
Buying sentiment has also chilled this week because of greatly reduced expectations that the U.S. Federal Reserve will embark on more stimulus to help the American economic recovery.
Commodity prices and resource stocks recovered some of the losses incurred this week but the gold sector was down 0.6 per cent while bullion gained $18 to US$1,632.10 an ounce. Barrick Gold Corp. (TSX:ABX) faded 54 cents to C$40.62 while Goldcorp Inc. (TSX:G) declined 44 cents to $40.54.
The financial sector was down 0.46 per cent as National Bank (TSX:NA) dropped 80 cents to $78.65 and TD Bank (TSX:TD) gave back 52 cents to $83.18.
The telecom sector lost 0.45 per cent as Rogers Communications (TSX:RCI.B) eased 36 cents to $39.57.
Tech stocks were also weak, with Celestica Inc. (TSX:CLS) off nine cents at $9.39.
The May crude contract was up $1.29 to US$102.76 after demand concerns drove prices down almost $4 earlier this week. The energy sector was ahead 0.22 per cent with Suncor Energy (TSX:SU) down 15 cents at C$31.11 and Talisman Energy (TSX:TLM) ahead 10 cents to $12.65.
Copper was up two cents to US$3.81 a pound after sliding 13 cents on Wednesday, helping the base metals sector rise 3.53 per cent after it sustained bruising losses the previous few days. Teck Resources (TSX:TCK.B) was up 63 cents at C$36.30 and First Quantum Minerals (TSX:FM) climbed $1.61 to $19.99.
European bourses were mixed with London's FTSE 100 index up 0.27 per cent, Frankfurt's DAX down 0.17 per cent and the Paris CAC 40 off 0.05 per cent.
On the corporate front, Harry Winston Diamond Corp. (TSX:HW) shares were down 39 cents to $14.12 after it reported consolidated fourth-quarter net profit attributable to shareholders of US$16.6 million or 19 cents per diluted share, compared with US$13.7 million or 16 cents in the prior-year period. Consolidated sales for the three months ended Jan. 31 were US$216 million, up from US$215.4 million.