The Toronto stock market was lower Friday as investors took in data showing severe winter weather taking a bigger than expected bite out of Canadian economic growth and slowing U.S. consumer spending.
The S&P/TSX composite index dropped 41.11 points to 14,547.84 as Statistics Canada said gross domestic product advanced at an annualized pace of 1.2 per cent. Economists had expected a gain of about 1.8 per cent. It was also down from a 2.7 per cent annualized gain in the final quarter of last year.
On a monthly basis, GDP was up 0.1 per cent during March, which was in line with expectations.
The Canadian dollar lost early momentum after the GDP report came out and was down of 0.12 of a cent to 92.16 cents (U.S.).
The GDP data came out ahead of the Bank of Canada’s next interest rate announcement scheduled for next Wednesday.
U.S. indexes were also in the red as other data showed that U.S. consumer spending slipped 0.1 per cent in April, the first decline in a year. Consumer spending had jumped 0.9 per cent in March, the biggest gain since the summer of 2009.
The Dow Jones industrials were down 43.22 points to 16,655.52, the Nasdaq gave back 4.33 points to 4,243.62 and the S&P 500 index slipped 2.61 points to 1,917.42.
Later in the morning, traders will look to the latest consumer confidence data. The University of Michigan’s widely watched consumer-sentiment survey is expected to edge up to 82.5 in May, from 81.8 in April.
On the corporate front, French energy giant Total E&P Canada said late Thursday that it is putting its Joslyn oilsands project northwest of Fort McMurray, Alta., on hold indefinitely because of escalating costs. There were no indications as to whether the ownership structure of Joslyn would change. Currently, Total has a 38.25 per cent stake, Suncor Energy has 36.75 per cent, Occidental Petroleum has 15 per cent and Inpex Canada has 10 per cent. On Friday, Suncor shares were 22 cents lower to $41.49.
There are reports that French banking giant BNP Paribas is about to get hit with huge fines over a U.S. investigation of alleged financial wrongdoing. BNP is one of several banks that have held talks with U.S. regulators about payments to countries, people or entities that may have breached U.S. sanctions. Last year, the bank set aside $1.1-billion (U.S.) after becoming the subject of the investigation, but a month ago raised the possibility that the amount of fines could be “far in excess.”
The TSX base metals sector led decliners, down 0.8 per cent while July copper added a penny to $3.15 a pound.
June crude lost 77 cents to $102.81 a barrel and the energy sector declined 0.5 per cent.
The gold sector was the only advancer, up 0.2 per cent as August gold faded $2.50 to $1,254.60 an ounce.
The TSX is on its way to a losing week, largely because of sliding mining stocks. The gold sector has fallen six per cent over the past week while base metals have shed more than three per cent.
Gold prices in particular have been under heavy pressure this week with markets feeling more comfortable about the Ukraine crisis while there is more concern about deflation rather than inflation, particularly in Europe. In addition to falling bullion prices, the costs of getting gold out of the ground have increased.
The financials sector is ending the week flat even as most of the big banks breezed past analyst expectations for adjusted earnings.