Equity Markets
The S&P 500 was higher on Friday after a report showed U.S. job growth accelerated sharply last month, but a drop in IBM kept the Dow in negative territory.
The Dow Jones Industrial Average was down 28.75 points, or 0.14 per cent, at 20,922.72.
The S&P was up 1.86 points, or 0.08 per cent, at 2,394.66 and the Nasdaq slipped 1.39 points, or 0.02 per cent, at 6,073.95 after rising at the open.
In Toronto, Canada's main stock index rose as energy, technology and financial stocks led broad gains.
The Toronto Stock Exchange's S&P/TSX composite index rose 172.3 points, or 1.12 per cent, to 15,569.00 as nine of the index's 10 main groups advanced.
Data showed the U.S. economy created 211,000 jobs in April, more than the 193,000 jobs expected by the Street following a disappointing rise of 98,000 jobs in March. Statistics Canada reported that the country's unemployment rate fell in April to 6.5 per cent, its lowest level since October, 2008. However, the data also showed wage gains slowed to record lows and the economy added only 3,200 jobs in April, lower than the 10,000 forecast by economists.
Oil began to rebound in early trading Friday but still remained below the $47 (U.S.) mark. It had fallen earlier and sent investors to the sidelines and sparked a rally in safe-haven bonds, metals and currencies.
"The American job machine returned to form in April," TD senior economist James Marple said in a note. "The re-acceleration in job should assuage fears that economic growth is slowing in any meaningful way. This confirms the Federal Reserve's message this week that the economy remains on track."
Stocks in Asia and Europe were mostly lower. Tokyo's Nikkei was closed, but Hong Kong's Hang Seng and the Shanghai composite each lost 0.8 per cent on the final trading day of the week. In Europe, London's FTSE 100 was up 0.45 per cent, while the Paris CAC 40 gained 0.8 per cent and Germany's DAX added 0.22 per cent.
Commodities
Crude prices rebounded late Friday morning after a steep decline earlier in the session. Both Brent and WTI started to trim earlier losses after Saudi Arabia's OPEC Governor Adeeb Al-Aama told Reuters that OPEC and non-OPEC nations were close to agreeing a deal on supply cuts.
"Based on today's data, there's a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension is not firm yet," the Saudi official said.
Early on, U.S. West Texas Intermediate futures fell more than 3 per cent to touch its lowest level since November. Benchmark Brent was also down 3 per cent in early going. On Thursday, reports suggested OPEC was likely to extend its supply cuts through the rest of the year but were unlikely to agree to a deeper reduction. A meeting is scheduled for later this month.
"Fears that the OPEC's output reduction plans would not suffice to reduce the global supply glut weigh on the price of a barrel," LCG senior market analyst Ipek Ozkardeskaya said in a morning note. "Dip-buyers are expected to intervene into the $40 level for a minor correction, given that the oil market has stepped into the oversold territory."
Meanwhile, gold rebounded after two days of significant losses but remained on track for its biggest loss in six months on diminishing concern about the outcome of the French presidential election and growing expectations that the U.S. will raise interest rates next month.
Spot gold prices and U.S. gold futures for June were both higher early on. For the week, however, gold prices were seen ending the week down about 2.6 per cent, the biggest weekly decline since November.
Silver prices were up more than 1 per cent. Copper prices recovered from a five-month low as buyers returned to the market.
Currencies and bonds
The Canadian dollar remained well below the 73-cent (U.S.) mark but trimmed early morning losses as oil recovered some lost ground. The toxic mix of weaker commodities, worries over trade tensions with the United States and a widening gap between Canadian and U.S. interest rates have all played a factor in the loonie's decline. Some economist have also cited concerns about the Toronto housing market as also playing a part in the currency's downward trajectory. BMO senior economist Sal Guatieri notes that the Canadian dollar is now the worst performing major currency this year, falling 2 per cent against a 'wavering' greenback. The loonie traded as low as 72.50 cents (U.S.) overnight.
Oil's sharp decline triggered an increase in the yen. The euro hit its highest level in six months ahead of the French election. Polls now expect centrist Emmanuel Macron to handily beat right-wing and anti-euro rival Marine Le Pen.
The gap between French and German 10-year government borrowing costs also hit a six-month low.
The U.S. Treasury yield curve flattened after jobs growth in April rebounded and the unemployment rate fell to a near 10-year low, reinforcing the view that the Federal Reserve is likely to raise interest rates again in June.
Stocks set to see action
Canada's No. 2 pipeline operator, TransCanada Corp, reported a better-than-expected quarterly profit, helped by higher earning from its U.S. and Mexican natural gas pipelines business. Earnings from its U.S. natural gas pipelines more than doubled, helped by its acquisition of Columbia Pipeline Group Inc last year for about $13-billion. Profit from its Mexico natural gas pipelines also rose about 162 per cent to $118-million. The company's net profit attributable to shareholders rose to $643-million, or 74 cents per share, in the first quarter ended March 31 from $252 million, or 36 cents per share, a year earlier. The latest quarter included about $48-million in charges, mainly related to the acquisition of Columbia Pipeline Group. The year-ago quarter included charges of about C$211 million, mainly related to the termination of Alberta power purchase agreements. Excluding items, the company earned 81 cents per share, beating analysts' average estimate of 74 cents per share, according to Thomson Reuters I/B/E/S.
Air Canada reported a quarterly loss that was much smaller than expected, as it flew more passengers, offseting a sharp rise in fuel costs. Passenger revenue increased 8.1 per cent to $3.1-billion in the first quarter ended March 31, Canada's largest airline said, as passenger traffic rose 14 per cent. Air Canada has added more wide-body aircraft to its fleet that has helped the airline expand into new routes in Europe and Asia. The company said adjusted cost per available seat mile (CASM) — a measure of how much an airline spends to fly a passenger — fell 5.7 per cent in the quarter.
ChemChina has won more than enough support from Syngenta shareholders to clinch its $43-billion takeover of the Swiss pesticides and seeds group, the two companies said on Friday. The deal, announced in February 2016, was prompted by China's desire to use Syngenta's portfolio of top-tier chemicals and patent-protected seeds to improve domestic agricultural output. It is China's biggest foreign takeover to date.
Warren Buffett said he has sold about one-third of Berkshire Hathaway Inc.'s big stake in IBM Corp., CNBC reported, reducing a bet by the famed investor that surprised many and which so far has yet to prove successful.
Home Capital Group Inc. is facing a major cash demand in coming weeks as $325-million of institutional deposit notes mature, adding more urgency to the mortgage lender's need to secure long-term financing.
Amazon.com Inc. Chief Executive Officer Jeff Bezos sold about $1-billion in company stock as part of a planned divestiture, a month after the world's third-richest man said he spends about that amount annually on his space exploration company Blue Origin LLC, Bloomberg reported. Bezos sold 1 million shares from Tuesday to Thursday ranging in price from about $935 to $950 per share, according to a regulatory filing on Thursday. He still owns 79.9 million shares, or about 17 percent of the company, down from 83 million shares at the end of 2015.
Cigna Corp. reported a higher-than-expected quarterly profit on Friday, helped by strength in its commercial business and raised its adjusted earnings forecast for the year. Last week, a U.S. appeals court blocked Anthem Inc's bid to merge with Cigna, upholding a lower court's decision that the $54 billion deal should not be allowed because it would lead to higher prices for healthcare. Anthem said on Friday it was filing a petition with the United States Supreme Court to review the appeals court decision. Excluding items, the company earned $2.77 per share, well above the analysts' average estimate of $2.45. Its shares rose 2.7 per cent in premarket trading.
After the bell on Thursday, Pembina Pipeline Corp., fresh off its $5.8-billlion deal to acquire Veresen Inc., easily surpassed the Street'ss consensus with adjusted first-quarter earnings of 49 cents a share, compared to an average forecast of about 34 cents. Pembina's quarterly profit more than doubled over the same period last year. The company's CEO, Mick Dilger, called it a "very successful start to a transformational year."
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Economic News
Canada's unemployment rate fell last month to 6.5 per cent, its lowest level since the country was within the grips of the global financial crisis in October, 2008, but wage growth stalled to its weakest in more than two decades. Statistics Canada says hourly wages expanded by 0.7 per cent in April, the slowest year-over-year growth since it started collecting that data in January, 1997. Canada added 3,200 jobs during the month, Statistics Canada reported in Ottawa, less than the 10,000 employment gain forecast by economists. Statistics Canada says a drop in youth participation helped push the jobless rate down by 0.2 percentage points even though overall employment was almost unchanged. The unemployment rate was 0.6 percentage points lower compared to a year earlier. A consensus of economists had expected the unemployment rate to stay at 6.7 per cent, according to Thomson Reuters.
Hiring rebounded in April as U.S. employers added 211,000 jobs, a sign the economy's sluggish growth in the first three months of the year may prove temporary. Th figure was higher than expected as economists were estimating the economy would create 193,000 jobs in March. The Labor Department says the unemployment rate ticked down to 4.4 per cent from 4.5 per cent, reaching its lowest level in a decade. That also beat expectations as the Street was expecting the unemployment rate to tick up to 4.6 per cent. The figures suggest that businesses expect consumer demand to rebound after a lacklustre showing in the first quarter, when Americans boosted their spending at the slowest pace in seven years.
Average paychecks grew more slowly, increasing 2.5 per cent over the past 12 months. That's below March's annual gain. Typically, employers are forced to pay more as they compete for a smaller pool of unemployed workers. Hourly pay gains are usually closer to 3.5 per cent in a strong economy.
(1:30 p.m. ET) U.S. Fed chair Janet Yellen speaks at Brown University in Providence, RI on "125 Years of Women's Participation in the Economy"
With files from Reuters, Bloomberg, The Associated Press and The Canadian Press