Jan 3, 2013 / 7:26 am
TORONTO - The Toronto stock market was lower Thursday after a last-minute deal to avert big tax hikes and spending cuts in the U.S. sparked a relief rally on the first trading day of the year.
But buying enthusiasm faded as the deal between the White House and Congress left unsolved several budget measures, mainly government spending cuts.
The S&P/TSX composite index lost 36.67 points to 12,504.1 while the TSX Venture Exchange eased 4.21 points to 1,235.63.
The Canadian dollar edged up 0.01 of a cent to 101.51 cents US.
New York indexes were also weak while traders digested positive jobs data ahead of Friday's non-farm payrolls report for December and looked to the mid-afternoon release of the minutes from the latest U.S. Federal Reserve meeting.
The Dow Jones industrials was down 47.67 points to 13,364.88 as payroll firm ADP reported that the U.S. private sector created 215,000 jobs last month. Economists forecast that Friday's government report would show the economy added 150,000 jobs in December.
Other data showed that more Americans sought unemployment benefits last week, though the winter holidays likely distorted the data for the second straight week.
The Labour Department says weekly applications rose by 10,000 to a seasonally adjusted 372,000. The previous week's total was revised higher.
The Nasdaq composite index was 7.28 points lower to 3,104.98, and the S&P 500 slipped 3.89 points to 1,458.53.
A last-minute deal agreed to by U.S. lawmakers late Tuesday triggered a global market rally on Wednesday, sending the TSX up 107 points and the Dow industrials surged 308 points.
But traders worry that U.S. budget talks could pose a threat to risk appetite for months.
For one thing, while the New Years Eve deal settled tax rates, the deal only postponed automatic spending cuts to defence and domestic programs for two months. And it doesn't include any significant deficit-cutting agreement, meaning the country still doesn't have a long-term plan on how to curb spending.
On top of that, the U.S. government also faces what are likely to be tough negotiations over raising the country's debt limit in February.
Worries about further political wrangling pushed the U.S. dollar higher against many currencies, helping to depress some commodity prices, which also racked up solid gains Wednesday.
That is because a stronger greenback makes it more expensive for holders of other currencies to buy oil and metals which are dollar-denominated.
The energy sector lost 0.5 per cent as the February crude contract on the New York Mercantile Exchange gave back 32 cents to US$92.80 a barrel. Suncor Energy (TSX:SU) lost 21 cents to C$33.20.
February bullion lost $10.90 to US$1,677.90 an ounce, pushing the gold sector down almost one per cent. Goldcorp Inc. (TSX:G) faded 45 cents to C$36.50.
The base metals sector declined 0.6 per cent with March copper unchanged at US$3.73 a pound. Teck Resources (TSX:TCK.B) declined 30 cents to C$37.20.
All sectors were lower, save for financials and telecoms which registered small gains.
European bourses were mixed with London's FTSE 100 index up 0.08 per cent, Frankfurt's DAX lost 0.25 per cent while the Paris CAC 40 fell 0.44 per cent.
Earlier in Asia, benchmarks in Hong Kong and Sydney rose modestly and crested above the 19-month highs hit Wednesday. Hong Kong's Hang Seng Index rose 0.1 per cent while Australia's S&P/ASX 200 rose 0.7 per cent. Benchmarks in Singapore, Taiwan, Indonesia, Thailand, the Philippines and New Zealand also rose while South Korea's Kospi fell 0.6 per cent.
Markets in Japan and mainland China were closed for extended holidays until Friday.
In corporate news, Brookfield Asset Management (TSX:BAM) and New York-based fund manager Pershing Square have resolved a dispute over General Growth Properties (NYSE:GGP), owner-operator of regional shopping malls in 41 states. Brookfield is the largest shareholder of GGP and Pershing controlled the second-largest block when the dispute between the fund managers arose last summer. Regulatory documents filed Thursday show Pershing has dropped efforts to have General Growth sold and Brookfield has agreed to buy GGP warrants held by Pershing. Brookfield shares dipped five cents to $36.55.
Hormel Foods is buying the Skippy peanut butter product line from Unilever for approximately US$700 million as it looks to strengthen its business overseas and branch out beyond its meat business that includes Spam. Skippy, which debuted in 1932, has 11 varieties of peanut butter products. It is the leading brand in China and is sold in more than 30 other countries.
Read more Business News
|QHR Technologies Inc||1.28||+0.09|
|Anavex Life Sciences||0.38||0.00|
|Copper Mountain Mining||1.54||-0.01|
This column is the last of three, for how to prove your personal injury claim. It is the piece de resistance of the trilogy, the Chuck Norris piece – the final say! As mentioned in the first two...
The bank manager just phoned and asked for full and immediate repayment of the line of credit because the latest, (and they were late!), financial statements showed continuing losses and falling sales...
Recently I recorded a video series for my keynote speaking business. It was called from Faith to Future. In one of the episodes, I talked about the concept of using hard work to get out of a difficul...
- Bruce Lee's iconic yellow jumpsuit fetches $100,000 at Hong Kong auction
- Spotify to allow users to create playlists on phones and tablets and listen to them for free
- US lurching from 'crisis to crisis,' politics influenced by money: Gary Doer
- Governments offers help to develop seal products in backing Atlantic industry
- Precision Drilling shares plummet as Alberta fund manager sells stake
- Most actively traded companies on the TSX, TSX Venture Exchange markets
- CIBC logs $836M profit in Q4, cautiously optimistic about next year
- Auto insurers urge holiday season refresher as young drivers return home
- Canadian Press NewsAlert: Canada creates 21,600 jobs, Nov. jobless rate 6.9%
- New CEO will help prepare Royal Bank for future, as divisions feel the pressure
- TD Bank Q4 profit rises to $1.62 billion, adjusted earnings up but miss estimate
- TSX drops 105 points amid mixed earnings from RBC, TD and CIBC, Fed concerns