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In this Friday, Nov. 22, 2013, file photo, Robert Oswald, right, works with fellow traders on the floor of the New York Stock Exchange. (Richard Drew/AP)
In this Friday, Nov. 22, 2013, file photo, Robert Oswald, right, works with fellow traders on the floor of the New York Stock Exchange. (Richard Drew/AP)

At midday: TSX heads lower, traders look for Fed tapering clues Add to ...

The Toronto stock market was slightly lower Thursday morning while traders looked to U.S. job creation data coming out Friday.

The S&P/TSX composite index eased 19.83 points to 13,594.8, held back by declining mining stocks as gold and copper prices retreated.

The Canadian dollar fell 0.48 of a cent to 92.08 cents (U.S.) amid weak housing data.

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Canada Mortgage and Housing Corp. said housing starts came in at an annual rate of 189,672 units in December, a decrease from 197,797 in November.

Other data from Statistics Canada showed that contractors took out $6.8-billion worth of building permits in November, down 6.7 per cent from October.

U.S. indexes turned weaker as traders took in a strong reading on American jobless insurance claims.

The U.S. Labor Department reported that applications for jobless insurance fell by 15,000 last week to 330,000.

The Dow Jones industrials lost 19.68 points to 16,443.06, the Nasdaq gained 3.57 points to 4,162.04 while the S&P 500 index was ahead 0.32 of a point to 1,837.81.

Traders hope that Friday’s U.S. non-farm payrolls report will provide some direction on how the U.S. Federal Reserve plans to proceed on further tapering to its massive monthly bond purchases. The key stimulus program was cut last month from $85-billion a month to $75-billion, making further cuts contingent on economic performance, particularly the job market.

U.S. markets finished in the red Wednesday after the minutes from the Fed meeting last month failed to provide any clues as to how quickly the Fed might proceed.

But there are concerns that a strong jobs report could persuade the Fed to accelerate its tapering program.

Data released Wednesday indicated that Friday’s government employment report could exceed expectations that 195,000 jobs were created last month. Payroll firm ADP said that the U.S. private sector alone created 238,000 jobs in December.

“Better news which should say the economy is stronger has a negative tone (because it suggests) tapering will be a lot faster,” observed Sadiq Adatia, chief investment officer at Sun Life Global Investment..

“This is just a short term thing right now. I think people will see economic news as being positive and I think from that standpoint that we will see a decent year on the market.”

Canadian jobs data also comes out on Friday with expectations that about 13,000 jobs were cranked out during December.

The base metals sector led decliners on the TSX, down 2.1 per cent while March copper lost five cents to $3.29 (U.S.) a pound. Teck Resources dropped 70 cents to C$25.58 while HudBay Minerals fell 37 cents to $8.44.

Adatia added that there is some unease about the fact that markets have been generally lower so far this year.

“Because the markets haven’t moved up, people are getting a little worried and thinking maybe the metals aren’t going to move up this year and you are seeing people not very positive about metals right now.”

The energy sector also weighed on the TSX, down 0.42 per cent as the February crude contract on the New York Mercantile Exchange gave back 25 cents to $92.08 (U.S.) a barrel.

Husky Energy Inc. has given the green light to two new heavy oil construction projects in Saskatchewan in the Lloydminister region. Husky says the two projects will deliver a total of 20,000 barrels per day, with the first oil expected in 2016 and its shAres were down 38 cents to C$32.84.

The industrials sector was flat but Canadian Pacific Railway was ahead $1.56 to $159.30.

The federal Transportation Safety Board says their preliminary investigation into a Canadian National Railways train derailment in northwestern New Brunswick has found a cracked wheel and a broken rail but it’s too early to say what caused the train to leave the tracks. A CN spokesman says the priority now is to extinguish the fire on three cars carrying crude oil and liquefied petroleum gas, along with burning diesel.

CN shares were 60 cents lower to $58.03.

February bullion was up 60 cents to $1,226.10 (U.S.) an ounce and the gold sector rose a slight 0.1 per cent. Goldcorp gained 47 cents to C$24.34.

On the earnings front, Quebec-based pharmacy chain Jean Coutu had $62.5-million of net income or 30 cents a share in its fiscal third quarter, an increase from $56.2-million a year earlier and two cents higher than analyst estimates. However, the Jean Coutu’s revenue were below estimates, falling to $712.5-million from $716.6-million. Its shares gained two cents to $18.65.

Investors also looked to the release of earnings from resource giant Alcoa after the close.

European bourses were lower as London’s FTSE 100 index and Frankfurt’s DAX declined 0.4 per cent and the Paris CAC 40 dropped 0.9 per cent.

 
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