North American stocks opened mixed on Thursday as investors responded to the latest batch of economic news and awaited key monthly reports due on Friday.
In Toronto, the S&P/TSX advanced 55.06 points, to 11,488.28 points. Shares of CGI Group were the most active, rocketing 15 per cent after the company said it had agreed to buy Anglo-Dutch IT services company Logica for $2.6-billion. The deal is designed to give CGI more business with blue-chip clients globally. Shares of San Gold Corp. , Reitmans (Canada) and Ivanhoe Mines all declined 2 per cent.
In New York, the S&P 500 slipped 2.4 points to 1,310.91 and the Dow Jones industrial average dropped 8.55 points to 12,411.31 points.
There were two key economic reports from the U.S. on Thursday morning. The number of U.S. workers seeking unemployment benefits for the first time increased during the week by 10,000, to 383,000, slightly more than the 370,000 that economists had forecasted. A more detailed picture on the U.S. job market is due Friday with the monthly report on new employment.
Meanwhile, the U.S. Commerce Department said gross domestic product increased at an annual rate of only 1.9 per cent in the first quarter. That compares with an original reading of 2.2 per cent made a month earlier in the advance report.
While the decline might suggest that the U.S. economic expansion is slowing, Paul Ashworth, chief U.S. economist for Capital Economics, points out that “the composition of that growth now looks a lot more promising.”
Specifically, he notes that inventories played a smaller role in the GDP number while the contribution from business investment was revised up from negative 0.2 per cent to positive 0.2 per cent.
“Business investment is now estimated to have expanded by 1.9 per cent rather than contracting by 2.1 per cent,” Mr. Ashworth wrote in a morning note. “That growth rate also incorporates a bigger 3.9 per cent decline in government expenditure, which subtracted as much as 0.8 per cent from overall GDP growth, up from a 0.6 per cent drag in the first estimate.”
The yield on U.S. 10-year Treasury notes hit a new low, falling two basis points to 1.60 as investors worrying about the mounting financial risk in Europe directed more funds into low-risk holdings.
Copper futures prices for July delivery were flat at $3.393 (U.S.) a pound. The price of a barrel of oil fell 22 cents, to $87.60. Gold was up 40 cents an ounce to trade at $1,563.80. The loonie slipped 0.16 of a cent against the U.S. dollar, to 97.00 cents in early trading.