CP: TSX heads for lower open: traders look to jobs data
TORONTO -- The Toronto stock market headed for a lower open Friday despite Canadian job creation data that blew past expectations.
Statistics Canada reported the economy created 40,000 jobs last month. Economists thought that only about 5,000 positions would be turned out in December after job creation surged by 59,000 in November.
At the same time, the unemployment rate edged down to 7.1 per cent from 7.2 per cent.
The Canadian dollar came back from early declines to move up 0.03 of a cent to 101.24 cents US. It had been lower earlier as the American currency strengthened in the wake of indications that the Federal Reserve could wind up its bond buying stimulus program by the end of the year.
Positive jobless data from the U.S. had little effect on New York futures.
The U.S. Labour Department reported that the American economy created 155,000 jobs in December. That was in line with heightened expectations after payroll firm ADP reported Thursday that the U.S. private sector cranked out 215,000 jobs last month.
The Dow Jones industrial futures edged up five points to 13,324, the Nasdaq futures gained 7.75 points to 2,733.25 while the S&P 500 futures added 2.9 points to 1,456.5.
Buying sentiment was being held back on worries about just how long the U.S. Federal Reserve will continue with its economic stimulus program that involves the purchase of bonds to keep interest rates ultra low.
The minutes of the latest Fed policy meeting released on Thursday showed that policy-makers expressed broad support for the Fed's plan to buy bonds to support the U.S. economy. But there was a split over how long to continue the bond purchases.
Some of its voting members thought they would continue through this year, while others thought they should be slowed or stopped before the end of 2013 amid concerns that the continued bond purchases, known as quantitative easing, would destabilize the economy.
The mining sector was expected to lead TSX losses as speculation over what the Fed may do sent gold prices tumbling with the February bullion contract on the New York Mercantile Exchange down $32.60 at US$1,642 an ounce.
The Federal Reserve's quantitative easing program has involved printing more dollars to buy up bonds. The program has been supportive of gold prices since bullion looked attractive as an inflation hedge.
A stronger U.S. dollar also punished commodity prices. That's because a stronger greenback makes it more expensive for holders of other currencies to buy oil and metals, which are dollar denominated.
March copper fell three cents to US$3.69 a pound while February crude on the Nymex lost 86 cents to US$92.06 a barrel.
European bourses generally improved slightly in the wake of the American jobs report, with London's FTSE index up 0.34 per cent and Frankfurt's DAX up 0.03 per cent. The Paris CAC 40 was off 0.11 per cent.
Earlier in Asia, Tokyo's Nikkei 225 jumped 2.8 per cent to its highest closing in 22 months. Much of the enthusiasm for Japanese shares comes from the steadily weakening yen, a big help to Japanese companies that sell abroad.
Elsewhere, however, investor fervour wilted. Hong Kong's Hang Seng index fell 0.3 per cent, South Korea's Kospi lost 0.4 per cent while Australia's S&P/ASX 200 shed 0.4 per cent.
In corporate news, Catalyst Paper Corp. is preparing for a return to the Toronto Stock Exchange next week. The B.C.-based pulp and paper producer, which was delisted from the market last March and completed a court supervised restructuring in June, says a new class of shares will trade under the symbol CYT starting on Jan. 7.
Enbridge Inc. (TSX:ENB) says it will spend $400 million to expand the capacity of its pipeline system between Hardisty, Alta., and the U.S. border. Enbridge says the project involves increasing pumping horsepower and that no new line pipe construction is involved. It expects to increase capacity by 230,000 barrels a day when the upgrade comes on line in 2015.
Eli Lilly says its 2013 earnings will grow at a pace that tops Wall Street expectations even though the drugmaker will lose U.S. patent protection for two more key products in the new year. The company forecasts adjusted 2013 earnings of between $3.75 and $3.90 per share on $22.6 billion to $23.4 billion in revenue. Analysts expect earnings of $3.72 per share on $22.87 billion in revenue.
