RTTN: TSX Dives On Global Growth Concerns; Gold Rallies - Canadian Commentary
(RTTNews) - Toronto stocks were lingering deep in the red Friday morning amid concerns over global economic growth. Today's data from south of the border revealed that job growth in the U.S. came in at an anemic rate in May and across the Atlantic, euro zone manufacturing activity deteriorated at the strongest pace in nearly three years in May. Overnight data revealed manufacturing weakened in China.
The S&P/TSX Composite Index lost 146.43 points or 1.27 percent to 11,366.78, after adding nearly 80 points or 0.70 percent in the previous session.
The Energy Index lost 3 percent as the price of crude oil dipped to a 2-year low Friday morning on weak manufacturing data from China, the second largest oil consuming nation. Overnight data from China revealed the official China purchasing managers index fell to 50.4 from 53.3 in April and lower than economists' expectations for a reading of 51.5. Crude for July lost $3.07 to $83.46 a barrel.
In the oil patch, Baytex Energy Corp. (BTE.TO), Pacific Rubiales Energy (PRE.TO), Trilogy Energy (TET.TO) and Cenovus Energy (CVE.TO) lost around 4 percent each.
Junior oil and natural gas exploration company Cequence Energy (CQE.TO) dipped 8 percent after announcing that it would acquire Open Range Energy Corp. (ONR.TO) in exchange of 1.065 of its shares for each Open Range common share. The aggregate value of about C$103 million translates into an offer price of C$1.37 per Open Range share, as against the latest closing price of C$1.03 per share.
Among financial plays, TD Bank (TD.TO), CIBC (CM.TO) and Royal Bank (RY.TO) were down around 2 percent each.
Meanwhile, gold stocks were trading higher amid a rebound in bullion prices. The price of gold was moving higher Friday morning amid non-farm payroll report. Gold for August surged $49.50 to $1,613.70 an ounce.
Royal Gold (RGL.TO), Goldcorp. (G.TO), Iamgold (IMG.TO) and Agnico-Eagle Mines (AEM.TO) surged around 8 percent each.
In economic news, Statistics Canada said real gross domestic product rose 0.5 percent in the first quarter, the same pace as in the previous quarter. On a monthly basis, real GDP by industry edged up 0.1 percent in March. Business investment contributed the most to first-quarter GDP growth, with final domestic demand growing 0.3 percent.
From the U.S., a report from the Labor Department revealed that the conomy added a net of just 69,000 new jobs in May, far lower than the 150,000 expected by most economists. Furthermore, the already week job creation numbers posted for April were revised down sharply to show a gain of just 77,000 positions, 38,000 fewer than the 115,000 initially reported. At the same time, the unemployment rate ticked up to 8.2 percent in May from the 8.1 percent reported in April, a disappointing figure to economists who had predicted that the rate would hold level.
Meanwhile, data from the Commerce Department revealed that personal income edged up by 0.2 percent in April following a 0.4 percent increase in March. Economists had expected income to increase by about 0.3 percent. A;so, the report said personal spending rose by 0.3 percent in April after climbing by 0.2 percent in March. The increase matched the expectations of economists.
Elsewhere, euro zone manufacturing activity deteriorated at the strongest pace in nearly three years in May, detailed results of a survey conducted by Markit Economics showed. The seasonally adjusted purchasing managers' index, a performance indicator for the manufacturing sector, fell to 45.1 in May from 45.9 in April. This was marginally above the flash estimate of 45. The PMI has signaled contraction in each of the past ten months.
A report from the Eurostat revealed that the euro zone jobless rate came in at 11 percent in April, the same rate as seen in March and matching economists' expectations. About 17.4 million were unemployed in the euro area. Compared with March, the number of persons unemployed increased by 110,000 in April.
