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At midday: TSX climbs as U.S. service sector improves

trader works on the floor of the New York Stock Exchange in this file photo.

Lucas Jackson/Reuters

The Toronto stock market was slightly higher at midday Wednesday as a positive reading on the U.S. services sector managed to balance an unexpectedly weak report on private sector job creation in the United States.

The S&P/TSX composite index climbed 35.81 points to 13,540.29 while the Canadian declined 0.1 of a cent to 90.14 cents (U.S.).

The Dow Jones industrials fell 70.41 points to 15,374.83 after the Institute for Supply Management said its non-manufacturing index showed rising expansion during January, coming in at 54, up a full point from December.

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The Nasdaq was down 54.07 points to 3,977.45 while the S&P 500 index eased 14.12 points to 1,741.08.

Earlier, payroll firm ADP reported the U.S. private sector created 175,000 jobs during January, about 15,000 short of what economists expected. The U.S. government's employment report for January is expected Friday and economists have estimated a total of about 190,000 jobs were created.

Another ISM survey on manufacturing sparked a drop on stock markets Monday after it came in lower than expected. The report followed other data that showed the pace of expansion of the Chinese manufacturing sector had slowed.

The data raised questions about whether economic problems in emerging markets could spread to more developed economies.

The concerns come as the U.S. Federal Reserve moves to cut back its monthly bond purchases, a measure that helped keep the lid on long-term interest rates and encouraged traders to put their money in higher yielding securities such as stocks.

Emerging markets also benefited from a flood of cheap money which is turning against them as traders seek safer returns.

The uncertainty has triggered a steep downturn on stock markets, particularly in the U.S. where the S&P 500 is down almost six per cent from the start of 2014.

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"For whatever reason, the market is starting to concentrate on the negative," said Allan Small, senior adviser at HollisWealth.

"And there's a lot of it – slowdown in China, the Fed reducing stimulus, the emerging markets story – but overall if anyone tries to pinpoint one reason for the selloff, they're just being foolish."

On the corporate front, the union representing 3,000 workers at Canadian National Railways including conductors and yard workers has given CN 72-hours strike notice. CN shares lost 28 cents to $59.04.

Shares of Intact Financial were lower after it said the December ice storm in Ontario and Quebec drove down quarterly net operating income to $143-million or $1.05 a share, missing estimates of $1.49 a share. Intact also announced its dividend will rise nine per cent to 48 cents a share. Its shares fell 90 cents to $66.61.

Strength on the TSX came from the gold sector, which rose 0.46 per cent as April bullion gained $8.90 to $1,260.10 (U.S.) an ounce.

The energy sector was ahead 0.37 per cent while the March crude oil contract in New York slipped nine cents to $97.10 (U.S.) a barrel.

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The telecom sector led TSX decliners, down 1.34 per cent.

The base metals group was down 0.4 per cent while the March copper contract was flat at $3.19 (U.S.) a pound.

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