The Toronto stock market started the 2014 trading year in the red as resource stocks pulled back in the wake of a mixed bag of manufacturing data from China and the euro zone.
The S&P/TSX composite index fell 45.43 points to 13,576.12 while the Canadian dollar was ahead 0.15 of a cent to US 94.17 cents (U.S.).
U.S. indexes were also in the red despite further evidence that U.S. layoffs are low and hiring will likely remain steady. The Labor Department said that the number of Americans seeking unemployment benefits dipped 2,000 last week to a seasonally adjusted 339,000.
Applications are a proxy for layoffs and appear to have stabilized near pre-recession levels at a level consistent with solid hiring.
The Dow Jones industrials dropped 82.39 points to 16,494.27, the Nasdaq declined 28.71 points to 4,147.88 and the S&P 500 index was down 9.77 points to 1,838.59.
Two manufacturing surveys released Thursday showed Chinese activity slowed in December. The China Federation of Logistics & Purchasing said its purchasing managers index declined to 51 from November's 51.4 on a 100-point scale. Numbers above 50 show an expansion. A separate survey by HSBC Corp. declined slightly to 50.5 from 50.8 in November.
Meanwhile, the euro zone manufacturing purchasing managers index in December was confirmed at 52.7 as expected.
However, results across the region were mixed on a country-by-country basis.
The French reading was revised slightly down, but the German reading was revised marginally higher. Italy's PMI edged higher while Spain's reading cleared the 50-mark, which signals expansion.
"The overall euro zone number also backs hopes for a strengthening of economic activity this year, which is encouraging," observed a commentary from Action Economics.
Traders also looked ahead to the release later in the morning of the Institute for Supply Management's latest reading on the American manufacturing sector.
Economists expect the index to show a slight slowdown in expansion, coming in at 57, down slightly from 57.3 in November.
Commodity prices were mixed in the wake of the manufacturing data with the February crude contract on the New York Mercantile Exchange down $1.46 to $96.96 (U.S.) a barrel. The TSX energy sector declined 0.75 per cent as Canadian Natural Resources lost 58 cents to C$35.36.
The base metals sector lost 0.6 per cent while March copper was down a cent to $3.39 (U.S.) a pound. Teck Resources shed 45 cents to C$27.20.
Tech stocks also weighed with BlackBerry off nine cents to $7.81.
The financial sector also moved lower as Manulife Financial gave back 27 cents to $20.69.
The only area of support came from the battered gold sector, up 2.5 per cent as February bullion climbed $20.50 to $1,222.80 (U.S.) an ounce. Goldcorp gained 60 cents to C$23.64.
North American markets started a fresh trading year on the back of a solid lift for 2013 with the TSX ahead 9.55 per cent. Gains would have been stronger had it not been for a slide of almost 50 per cent in the gold sector and a 21-per-cent tumble in base metals.
U.S. markets racked up stronger advances, benefiting from another year of stimulus measures from the Federal Reserve with the Dow jumping 26.5 per cent.
On the corporate front, TransCanada Corp. has acquired an additional new solar power generation facility in eastern Ontario. The Mississippi Mills project near Pakenham has 10 megawatts of generating capacity. The deal is part of an agreement to acquire a total nine solar power generation plants in Ontario from Canadian Solar Solutions Inc. TransCanada shares declined 17 cents to $48.37.
The price of Fiat shares on the Milan exchange soared 12 per cent after the Italian automaker announced it had clinched a deal to acquire the rest of Chrysler.
Fiat SpA said Wednesday night that it had reached an agreement with the United Auto Workers union-controlled trust fund holding 41.5 per cent of Chrysler's shares. Fiat already possesses the remaining shares. Fiat says it will pay $1.75-billion in cash. Another $1.9-billion will be paid as extraordinary dividends.
European bourses were in the red as London's FTSE 100 index lost 0.21 per cent, Frankfurt's DAX was down 0.45 per cent and the Paris CAC 40 fell 0.87 per cent.
Earlier in Asia, China's benchmark Shanghai Composite Index shed 0.3 per cent in the wake of the manufacturing data. Hong Kong's Hang Seng Index lost 0.1 per cent.
Tokyo was closed for the New Year's holiday. Seoul lost 2.2 per cent.