The Toronto stock market was slightly higher Wednesday as investors digested strong U.S. jobs data ahead to the afternoon release of the minutes from last month’s U.S. Federal Reserve meeting.
The S&P/TSX composite index gained 5.52 points to 13,602.45, dragged down by further declines in the gold sector.
The Canadian dollar continued to plumb multi-year depths, down another 0.23 of a cent to 92.6 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 expectations that the U.S. Federal Reserve could move more quickly than thought to wind up 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 51.6 points to 16,479.34, the Nasdaq added 1.79 points to 4,154.97 and the S&P 500 index declined 2.22 points to 1,835.66.
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 minutes will be scoured for answers to key questions, (such as) will the taper pace continue at $10-billion per meeting, thus ending QE by Q4, and what will it take to speed up or slow down the process,” said BMO Capital Markets senior economist Michael Gregory.
“However, we doubt we’ll be able to cull definite answers from the minutes, and are looking only for clues.”
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.
TSX gains were paced by the tech sector as BlackBerry continues on a roll with its shares up 70 cents or 7.66 per cent to $9.84 following a 63-cent rise Tuesday after CEO John Chen told Bloomberg TV that the smartphone maker plans to re-focus on keyboard-equipped phones. Chen said the company’s phones will “predominantly” have physical keyboards in the future, rather than touch screens.
Elsewhere, Open Text climbed $1.23 to $100.71.
The energy sector was up a slight 0.1 per cent while the February crude oil contract on the New York Mercantile Exchange was 26 cents lower to $93.93 (U.S.) a barrel.
The gold sector was the biggest drag, down 1.5 per cent as February gold bullion contract slipped $6.80 to $1,222.80 (U.S.) an ounce. Barrick Gold faded 22 cents to C$19.45 while Goldcorp fell 34 cents to $23.78. 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.
The March copper contract rose a cent to $3.36 (U.S.) a pound and the base metals segment dipped 0.15 per cent.
In corporate news, Hanfeng Evergreen Inc. says a planned going-private transaction has been called off and it’s looking at other strategic options. The Chinese fertilizer company, which lists its stock on the Toronto Stock Exchange, has ended an arrangement with Xinduo Yu, who had been attempting to buy up the Hanfeng traded shares he didn’t already own. Hanfeng shares plunged 15 cents to 35 cents.
European markets were lacklustre despite data showing a stabilization in unemployment and the biggest increase in monthly retail sales in 12 years.
Eurostat, the EU’s statistics office, said the euro zone’s unemployment rate held steady in November at a record 12.1 per cent for the eighth month running.
The agency also said retail sales during the month spiked by 1.4 per cent, far greater than the 0.3 per cent rise that had been expected.
The increase was the highest monthly gain since November 2001 and suggests households may finally be thinking that the region’s debt crisis is past its worst and that the recovery has legs.
London’s FTSE 100 index was off 0.37 per cent, Frankfurt’s DAX dipped 0.14 per cent while the Paris CAC 40 lost 0.3 per cent.
Earlier, Asian stocks were mostly higher. Tokyo’s Nikkei 225 gained 1.9 per cent, and Hong Kong’s Hang Seng added 1.3 per cent.
China’s Shanghai Composite lost early gains, closing 0.2 per cent lower.