Toronto barely changed; loonie falls on latest jobs data for June
TORONTO - The Toronto stock market managed just a small gain Friday amid a disappointing employment report that showed the Canadian economy unexpectedly lost 9,400 jobs in June.
The S&P/TSX composite index climbed 11.02 points to 15,125.50, held back by weak energy stocks. Gold issues advanced even as bullion prices declined.
The worse than expected jobs numbers also put pressure on the Canadian dollar, which fell 0.76 of a cent to 93.16 cents US.
Statistics Canada said the job losses sent the unemployment rate up one-tenth of a point to 7.1 per cent â€” the highest level since last December. Full-time employment rose by 33,500, partly making up for the loss of 43,000 part-time jobs.
Economists had forecast June would see 24,000 jobs created after a gain of 25,800 in May.
"We are seeing the economy slow down. We are seeing the housing sector slow down a bit. All those factors are going to cause further pressure on employment," said Sadiq Adatia, chief investment officer at Sun Life Global Investment.
"People are giving more credit to the economy than is justified, partly because they are getting caught up with the fact that the market has done well in Canada, implying that the Canadian economy is doing well and those are two different things."
Although there is underlying growth in the economy, employers generally remain cautious about hiring, Adatia said.
Meanwhile, Wall Street also saw relatively small moves amid a dearth of economic data in the U.S. The Dow Jones industrials rose 28.74 points to 16,943.81, the Nasdaq gained 19.29 points to 4,415.49 and the S&P 500 advanced 2.89 points to 1,967.57.
World markets took a hit Thursday amid rising concerns over Europe's financial stability after Portugal's Espirito Santo International, which owns the country's largest bank, reportedly missed a debt payment this week and was cited for accounting irregularities, echoing issues that sparked Europe's debt crisis four years ago.
On Friday, senior Portuguese officials dismissed speculation about the bank's financial stability, saying it had a 2.1-billion-euro (US$2.8-billion) cash cushion, enough to cover its exposure to other companies in the Espirito Santo group and keep it within regulatory requirements.
In corporate news, Wells Fargo reported its second-quarter profit rose three per cent, bolstered by loan growth, higher deposit balances and improved credit quality. Revenue slipped, but still topped analysts' estimates.
The largest mortgage lender in the U.S. said net income after taking out dividends on preferred stock was $5.42 billion, or $1.01 per share, for the period ended June 30. A year ago it earned $5.27 billion, or 98 cents per share.
Meanwhile, the August crude contract on the New York Mercantile Exchange plunged $2.10 to US$100.83 a barrel, resuming a two-week decline after a small uptick Thursday. Oil hit a 10-month high of $107 a barrel last month amid gains by insurgents in Iraq and other geopolitical concerns.
In other commodities, August gold bullion fell $1.80 to US$1,337.40 an ounce, while August copper was unchanged at US$3.27 a pound
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