People wait in line to enter a job fair in New York April 18, 2012.SHANNON STAPLETON/Reuters
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The Toronto stock market tumbled more than 150 points Friday morning as a weak U.S. jobs report raised more concerns about whether the United States can support a self-sustaining recovery.
The S&P/TSX composite index lost 160.77 points to 11,854.12, after the U.S. Labour Department reported that the economy created only 115,000 jobs during April, far less than the approximately 160,000 that economists expected.
"The very modest increase in U.S. non-farm payrolls in April will raise fears that the recovery is fading fast, just like it did at this time last year," said Paul Ashworth, chief U.S. economist at Capital Economics.
On the bright side, the unemployment rate edged down 0.1 of a point to 8.1 per cent and revisions to the past two months added an additional 53,000 jobs.
Traders also took in news that TransCanada has applied to the U.S. government for a new permit to build its controversial Keystone XL oil pipeline. The line would run from Hardisty, Alta., to Steele City, Neb. The application will include a new route through Nebraska that will skirt around the ecologically sensitive Sand Hills region. TransCanada shares dipped 28 cents to $42.67.
The TSX Venture Exchange was off 13.07 points to 1,403.46.
The Canadian dollar declined after the release of the jobs data, off 0.49 of a cent to 100.63 cents (U.S.).
U.S. markets were lower with the Dow Jones industrials down 129.72 points to 13,076.87.
The Nasdaq composite index lost 49.78 points to 2,974.52 and the S&P 500 index declined 17.06 points to 1,374.51.
Energy stocks led TSX declines, down almost three per cent as further signs of economic weakness that could erode demand sent crude prices tumbling. The June contact on the New York Mercantile Exchange plunged $4.36 or 4.25 per cent to $98.18 (U.S.) a barrel.
Government data shows that U.S. oil consumption dropped 5.3 per cent in the first quarter, and supplies have been growing for the last six weeks.
The European economy also is slowing down as euro zone governments continue to struggle with a mountain of debt.
Suncor Energy gave back $1.09 to $30.23 and Cenovus Energy shed $1.32 to $32.63.
The metals and mining sector lost 1.77 per cent with copper down three cents at $3.71 (U.S.) on top of an 11-cent loss over the last two days. Teck Resources ran down 80 cents to $34.54 and Mercator Minerals dropped 13 cents or 10.8 per cent to $1.07.
The financials sector was also a major source of weakness, down almost two per cent with Manulife Financial down 40 cents to $12.58 while Royal Bank fell $1.19 to $54.64.
The gold sector was the leading advancer, up 1.1 per cent as bullion prices ticked lower for a fifth session with the June contract off a dime to $1,634.70 (U.S.) an ounce. Goldcorp Inc. climbed 50 cents to $36.45 and Barrick Gold Corp. advanced 35 cents to $37.87 .
Commodities have been under pressure this week amid weak manufacturing data from Europe and China.
Stock markets came under additional pressure Thursday as a key gauge of the performance of the U.S. non-manufacturing sector showed further expansion during April but at a slower pace than expected. The sector accounts for 90 per cent of the U.S. economy and the weak performance helped push the TSX down 215 points.
On Friday, investors also focused on weekend elections in France and Greece. In France, President Nicolas Sarkozy has for weeks looked like he would lose to his socialist rival Francois Hollande, but recent opinion polls suggest the election could be tighter than expected.
Though a change in leadership in Paris could prompt a change in the way Europe responds to the debt crisis that's already seen three countries bailed out, the elections in Greece have the potential to prompt far more volatility once markets reopen on Monday.
That is because the traditional parties of right and left will not get anything like the level of support they have been used to. New Democracy and Pasok are backing the harsh terms of the most recent bailout, unlike many of the smaller parties that may well garner some support in Sunday's elections.
Losses on European markets also picked up following the jobs data with London's FTSE 100 index down 2.03 per cent, Frankfurt's DAX declined 1.85 per cent and the Paris CAC 40 dropped 1.78 per cent.
The major earnings news of the morning came from Air Canada. Its first-quarter loss came in at $210-million, far higher than last year's first quarter loss of $19-million as the carrier was buffeted by higher fuel costs and labour disruptions. It also took a hit from the bankruptcy of the company that formerly overhauled its planes. The loss amounted to 76 cents per share while the adjusted net loss was 64 cents per share.
By both measures, Air Canada did better than consensus estimates compiled by Thomson Reuters. Analysts had expected a net loss of 77 cents per share and adjusted loss of 78 cents per share. Air Canada's shares were unchanged at 92 cents.
Elsewhere, GMP Capital Inc. fell 59 cents or 9.93 per cent to $5.35 as it reported a net loss attributable to common shareholders of $2.3-million or four cents per diluted share in the first quarter, compared with net income of $22.5-million or 29 cents per diluted share in the same 2011 period. Revenue was $66.1-million, down 43 per cent.