The Toronto stock market was slightly higher Wednesday as investors speculated whether strong U.S. jobs data could persuade the Federal Reserve to accelerate the winding up of a key stimulus program.
They also looked ahead to the afternoon release of the minutes from last month’s Fed meeting.
The S&P/TSX composite index gained 11.78 points to 13,608.71 with lift coming primarily from miners and techs.
The Canadian dollar continued to plumb multi-year depths, down another 0.25 of a cent to 92.58 cents (U.S.) after falling over a cent Tuesday to its lowest close since late 2009.
The U.S. dollar strengthened after payroll firm ADP reported that the U.S. private sector created 238,000 jobs during December.
New York markets were mainly lower as the jobs data raised concerns that the U.S. central bank could move more quickly than thought to taper its $85-billion (U.S.) of monthly bond purchases.
The ADP data came out two days before the U.S. government releases its non-farm payrolls report and expectations are that the economy cranked out about 195,000 jobs in December.
The Dow Jones industrials lost 85.57 points to 16,445.37, the Nasdaq added 10.09 points to 4,163.27 and the S&P 500 index declined 1.73 points to 1,836.15.
The Fed decided at its December meeting to cut its asset purchases by $10-billion starting this month with further tapering dependent on economic data. Investors hope to find some clarity from the minutes of that meeting on just how quickly the central bank plans to end its monthly bond purchases.
The Fed said at the December meeting that further cuts in asset purchases were dependent on economic performance so traders are especially interested to see how job creation shaped up last month.
“(Tapering) is going to be data dependent but I think there’s a school of thought now that we will start to see that tapering of $10-billion, maybe $15-billion a month,” said Garey Aitken, chief investment officer at Franklin Bissett Investment Management.
“So they’re not just going to go from $85 (billion) to $75 (billion) and leave it there, this is going to be a methodical wind down of this so that by the third quarter, we have completely stopped (the asset purchases).”
TSX gains were paced by the base metals segment, up 0.25 per cent while the March copper contract lost early gains and was unchanged at $3.36 (U.S.) a pound. Performance was mixed with HudBay Minerals ahead 34 cents to $8.95 (Canadian) while Teck Resources declined 28 cents to $26.33.
The tech sector was largely supportive, up 0.8 per cent as Constellation Software rose $3.36 to $229 and Open Text climbed $1.90 to $101.38.
BlackBerry was unchanged after two days of solid gains at $9.14 after rising as high as $9.85 earlier in the morning.
The energy sector was up a slight 0.18 per cent while the February crude oil contract on the New York Mercantile Exchange was 38 cents lower to $93.29 (U.S.) a barrel. Suncor Energy gained 29 cents to $37.46 (Canadian).
The gold sector was the biggest drag, down 0.8 per cent as February gold bullion contract slipped $7.40 to $1,222.20 (U.S.) an ounce. Barrick Gold faded 28 cents to $19.39 (Canadian) while Goldcorp fell 26 cents to $23.86. The component was the worst performer on the TSX last year, losing almost 50 per cent, but it has been generally positive so far this year, up about four per cent over the last week.
Industrials also dragged with Canadian National Railway down $1.13 to $58.45. A CN train carrying propane and crude oil derailed in northwestern New Brunswick Tuesday. A spokesman said initial indications are that 15 cars and one locomotive derailed from a train that consisted of 122 cars and four locomotives.
In other corporate news, Monsanto reported better-than-expected first quarter earnings on higher sales of the company’s insect-repelling and herbicide-resistant soybean seeds in Latin America. Despite an 8.6 per cent increase in profit the company left its full-year fiscal guidance unchanged. Its shares shed early declines to advance $2.98 to $116.22 (U.S.).
European markets were lacklustre with London’s FTSE 100 index off 0.36 per cent, Frankfurt’s DAX slipped 0.19 per cent and the Paris CAC 40 lost 0.39 per cent.