Falling resource stocks kept the Toronto stock market in the red late morning Tuesday amid mixed manufacturing data and falling gold prices.
The S&P/TSX composite index lost 10.24 points to 15,615.49.
The Canadian dollar was down 0.35 of a cent to 91.62 cents (U.S.).
U.S. markets turned positive as data showed that U.S. manufacturing grew in August at the strongest pace in more than three years.
The Dow Jones industrials edged up six points to 17,104.45 as the Institute for Supply Management’s index for August showed growing expansion, coming in at 59, up from 57.1 in July.
“We’ve had some early indications that things were trending in the right direction for the manufacturing sector, but that number is certainly better than expected,” said Jean-Francois Dion, Portfolio Adviser, RBC Wealth Management.
The Nasdaq was up 16.78 points to 4,597.05 and the S&P 500 index ahead 1.43 points to 2,004.8.
The news was also positive from Canada as the RBC Canadian manufacturing purchasing managers’ index for August showed the group gained momentum in August with overall business conditions improving at the fastest past since last November. The index registered 54.8 in August, up from 54.3 in July.
But other data showed China’s official purchasing managers’ index dropped to 51.1 during August, while the private sector measure fell from July’s 50.2 reading, both worse-than-expected results.
The major economic event of the week happens Friday when the U.S. government releases its employment report for August. Economists are looking for another strong month of job creation in the neighbourhood of 220,000.
Canadian jobs data also comes out on Friday and it is expected Statistics Canada will report that about 10,000 jobs were created last month.
Also, the Bank of Canada makes its scheduled announcement on interest rates on Wednesday. The bank is widely expected to leave its key rate unchanged at one per cent.
The gold sector dropped 2.1 per cent as December bullion fell $22.10 to $1,265.30 (U.S.) an ounce. Gold had found some support amid tensions between Russia and Western countries over its involvement in fighting between rival factions in Ukraine. But the metal is being pressured at the same time by a rising U.S. dollar, the end of quantitative easing by the U.S. Federal Reserve expected this fall and the prospect of higher interest rates.
“The strength in the U.S. dollar has probably more than offset the rising geopolitical tensions,” added Dion.
“It’s still a very challenging environment for most gold companies, a lot of them have seen increases in their operating costs.”
The energy sector fell 1.35 per cent while October crude declined $1.69 to $94.27 a barrel.
Base metal stocks were also weak, down 0.9 per cent as December copper shed early losses in the wake of the American manufacturing data, up one cent to $3.17 a pound.
On the corporate front, Pembina Pipeline Corp. will acquire a pipeline system and an interest in a Saskatchewan ethane extraction plant for $650-million. The Vantage pipeline system originates in North Dakota and provides access to the North Dakota Bakken shale formation. Pembina shares rose $1.13 to $51.10.