The Toronto stock market started a busy trading week slightly lower as traders looked ahead to the release of top drawer economic data and the start to the U.S. corporate earnings season.
The S&P/TSX composite index declined 6.6 points to 13,542.26.
The Canadian dollar was off 0.35 of a cent to 93.64 cents (U.S.).
U.S. markets lost early momentum and the Dow Jones industrials down 8.41 points to 16,461.58, the Nasdaq down 12.42 points to 4,119.49, and the S&P 500 index shed 0.43 of a point to 1,830.94.
On the economic front, investors will take in the latest reading on the American non-manufacturing sector later in the morning. It is expected the Institute for Supply Management’s service sector index will come in at 55.1, an improvement from November’s reading of 53.9.
Markets are also waiting to scrutinize the minutes of the Federal Reserve’s December meeting mid-week. The Fed announced at that meeting it would start to cut back on its monthly US$85-billion of bond purchases, a key stimulus measure that supported a strong rally on markets last year, by $10-billion starting in January.
Traders will look for indications of when the Fed will accelerate that tapering and for the central bank’s latest take on the economy.
The Fed said in December further tapering would be linked to the economic recovery, in particular employment growth, so Friday’s U.S. non-farm payrolls report is of special interest. Economists look for the economy to have created about 195,000 jobs during December.
Canadian employment figures also come out on Friday and the consensus called for the economy to have cranked out 13,000 jobs during the month.
Overseas, traders will take in the latest trade, inflation and loans data from China later in the week. Two surveys last week showed manufacturing activity has weakened in December, which analysts said pointed to a downturn in business cycle.
Credit Agricole CIB in Hong Kong said it was increasingly clear that China’s growth has peaked and entering an economic downturn, which will hurt regional exports.
Investors will also start to focus on corporate earnings later this week when resource company Alcoa hands in fourth quarter data.
Expectations have been lowered in recent months with earnings from S&P 500 companies expected to have risen 6.3 per cent in the fourth quarter. That’s slower than the 9.3 per cent growth analysts expected, on average, at the end of September, according to FactSet.
Telecoms led declines with Telus down 38 cents to $36.40.
Financials were also negative as Scotiabank turned 31 cents lower to $65.15.
The energy sector was off 0.1 per cent as February crude contract on the New York Mercantile Exchange up 13 cents to $94.09 (U.S.) a barrel.
Crude fell six per cent last week due to growing inventories in the U.S. and an expected recovery in Libyan production.
March copper was down one cent to $3.34 (U.S.) a pound and the base metals sector was slightly lower.
The TSX gold sector led advancers, up 1.1 per cent while February bullion gained $1.40 to $1,240 (U.S.) an ounce. The trading year is only days old but the gold component is already the best performer, up more than three per cent over the past week after plunging almost 50 per cent during 2013. Barrick Gold faded 35 cents to C$19.66.
Tech stocks were largely positive with patents firm Wi-Lan up nine cents to $3.65.
BlackBerry Ltd. has appointed Ron Louks, who has held senior positions at HTC America Inc and Sony Ericsson, to help develop the company’s long-term product roadmap. Its shares on the TSX were up 11 cents to $8.20 on the TSX and ahead seven cents to $7.68 (U.S.) on the Nasdaq.
North American markets closed little changed last week with the TSX down 39 points while the Dow shed eight points.
Elsewhere on the corporate front, WestJet Airlines Ltd. had a load factor of 81.7 per cent in December, the second-highest on record for the month, but down from 81.9 per cent a year ago. Passenger traffic grew 7.2 per cent last month compared with last year, while capacity increased 7.4 per cent. WestJet shares edged five cents higher to $27.72 (U.S.).
And in the U.S., Men’s Wearhouse is raising its offer for Jos. A. Bank Clothiers to about $1.61-billion and taking the bid directly to its rival’s shareholders. Men’s Wearhouse Inc. is now offering $57.50 per share for Jos. A. Bank, up from its prior offer of $55 per share, or $1.54-billion. Jos. A. Bank rejected the previous offer in late December, saying it was too low.
European bourses were mixed with London’s FTSE 100 index and Frankfurt’s DAX up 0.24 per cent while the Paris CAC 40 dipped 0.14 per cent.
Earlier in Asia, China’s benchmark Shanghai Composite Index tumbled 1.9 per cent, extending losses from last week. Tokyo’s Nikkei shed 2.4 per cent and Hong Kong’s Hang Seng fell 0.6 per cent. South Korea’s Kospi bucked the trend to add 0.4 per cent.