Canada’s main stock index fell narrowly on Friday amid losses from the heavyweight financial and energy sectors.
The Toronto Stock Exchange’s S&P/TSX composite index lost 17.96 points, or 0.1 per cent, to 16,043.54.
Energy stocks reversed course in afternoon trading, finishing down 0.3 per cent, despite a 1.6-per-cent gain in shares of Suncor Energy Inc after it filed a mixed shelf offering. Vermilion Energy Inc. rose 1.4 per cent.
Meanwhile, Encana Corp. fell 2.9 per cent, while Crescent Point Energy Corp. dropped 1.1 per cent.
Financial stocks also fell 0.3 per cent led by a 1.6-per-cent drop by Bank of Nova Scotia. Toronto-Dominion Bank lost 0.9 per cent, while Bank of Montreal slipped 0.2 per cent.
Leading the index were NexGen Energy Ltd., up 7.4 per cent, Stars Group Inc., up 5.6 per cent, and Tahoe Resources Inc , higher by 5 per cent.
Lagging shares were MEG Energy Corp., down 4.4 per cent, Ivanhoe Mines Ltd., down 4.3 per cent, and TORC Oil & Gas Ltd., lower by 4.1 per cent
Wall Street stocks rose on Friday after the latest monthly jobs report pointed to strength in the U.S. economy and political tensions in Italy eased.
Technology stocks led the rally, with gains in behemoths such as Apple, Microsoft and Alphabet lifting the S&P tech index to a record intraday high.
Government data showed that the U.S. economy added 223,000 nonfarm jobs in May, topping the average estimate of economists polled by Reuters. The unemployment rate fell to an 18-year low of 3.8 per cent. Data on construction spending and industrial production also pointed to accelerating economic growth.
Markets also got a reprieve as Italy installed a coalition government, removing the risk of a repeat vote dominated by debate on whether the country would leave the euro.
“Strong data across the board is giving confidence to the Street that the first-quarter softness we saw in GDP was transitory,” said Anwiti Bahuguna, senior portfolio manager at Columbia Threadneedle Investments in Boston. “On the back of it, there is some stability on the European political front.”
Based on the latest available data, the Dow Jones Industrial Average rose 218.79 points, or 0.9 per cent, to 24,634.63, the S&P 500 gained 29.16 points, or 1.08 per cent, to 2,734.43 and the Nasdaq Composite added 112.22 points, or 1.51 per cent, to 7,554.33.
In the view of some investors, the strong economic data raised the likelihood the Federal Reserve will raise interest rates four times this year. Concerns that rising rates will dampen future growth have sent U.S. stocks tumbling on several occasions this year. But investors said they did not find Friday’s data concerning.
“The market will be driven by the strength of fundamentals,” Bahuguna said.
However, investors are keeping an eye out on developments around trade after Washington imposed steel and aluminum tariffs on imports from Canada, Mexico and the European Union.
Canada and Mexico retaliated, targeting U.S. steel and aluminum imports and products such as whiskey and blue jeans.
The Nasdaq was just over 1 per cent away from a record high as tech stocks largely cushioned the index in the past week even while the broader markets suffered. By comparison, the S&P 500 is 4.7 per cent off its peak.
“Tech isn’t in the headlines as groups that are going to be impacted by what’s going on with regards to tariffs in the EU, whereas others are,” said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta.
Oil prices retreated on Friday, after the dollar rose on better-than-expected U.S. employment data, which pressured greenback-denominated commodities, including crude.
U.S. West Texas Intermediate (WTI) crude futures fell $1.23 a barrel to settle at $65.81 a barrel. For the week, WTI was on track to drop about 3 per cent, adding to last week’s near 5-per-cent decline.
Global benchmark Brent fell 77 cents to $76.79 a barrel. It was set for a 0.4-per-cent gain for the week.
WTI’s discount to Brent = widened, settling at $11.02 a barrel after ballooning to as much $11.57 during the session, largest since 2015.
Domestic job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8 per cent. The U.S. Labor Department’s report also showed solid wage gains, which boosted expectations that the Federal Reserve would hike interest rates in June and later this year as well.
The strengthening dollar sparked selling in dollar-denominated commodities, said John Kilduff, a partner at Again Capital Management.
Concerns about growing U.S. crude production and a glut trapped inland due to a lack of pipeline capacity have pressured prices of WTI, doubling its discount to Brent over the course of a month.
U.S. crude production rose in March by to 10.47 million bpd, a monthly record, the Energy Information Administration said on Thursday.