Traders look to release of U.S. jobs data

An oil pump works at sunset on June 8, 2011, in the desert oil fields of Sakhir, Bahrain. THE CANADIAN PRESS/AP, Hasan Jamali

TORONTO - The Toronto stock market could be under pressure from energy companies at the open as oil prices racked up sizable declines for a third day amid signs of economic weakness that could erode demand.

But the tone on markets will largely be determined by the release of the U.S. non-farm payrolls report for April, which comes out an hour before the start of the open.

The Canadian dollar was slight higher, up 0.11 of a cent to 101.23 cents US.

Economists expect the U.S. economy created about 160,000 jobs last month.

The figures could well have a bearing on market expectations over whether the U.S. Federal Reserve enacts another monetary stimulus over the coming months. Recent indicators have suggested that the U.S. economy has lost steam at the start of this year.

The June crude contact on the New York Mercantile Exchange was down $1.48 to US$101.06 a barrel.

Bullion prices declined for a fifth session with the June contract down $2.10 to US$1,632.70 an ounce.

Copper gained a penny to US$3.74.

Commodities have been under pressure this week amid weak manufacturing data from Europe and China.

Stock markets came under additional pressure Thursday as a key gauge of the performance of the U.S. non-manufacturing sector showed further expansion during April but at a slower pace than expected. The sector accounts for 90 per cent of the U.S. economy and the weak performance helped push the TSX down 215 points.

On Friday, investors also focused on weekend elections in France and Greece. In France, President Nicolas Sarkozy has for weeks looked like he would lose to his socialist rival Francois Hollande, but recent opinion polls suggest the election could be tighter than expected.

Though a change in leadership in Paris could prompt a change in the way Europe responds to the debt crisis that’s already seen three countries bailed out, the elections in Greece have the potential to prompt far more volatility once markets reopen on Monday.

That is because the traditional parties of right and left will not get anything like the level of support they have been used to. New Democracy and Pasok are backing the harsh terms of the most recent bailout, unlike many of the smaller parties that may well garner some support in Sunday’s elections.

European markets were lower with London's FTSE 100 index down 0.67 per cent, Frankfurt's DAX declined 0.51 per cent and the Paris CAC 40 dipped 0.16 per cent.

Earlier in Asia, Hong Kong’s Hang Seng fell 0.8 per cent and South Korea’s Kospi lost 0.3 per cent.

However, mainland Chinese shares rose, with the benchmark Shanghai Composite Index up 0.5 per cent and the Shenzhen Composite Index adding 1.1 per cent.

The major earnings news of the morning came from Air Canada. Its first-quarter loss came in at $210 million, far higher than last year’s first quarter loss of $19 million as the carrier was buffeted by higher fuel costs and labour disruptions. The loss for the three month-period amounted to 76 cents per share, up from seven cents per share in the first quarter of 2011. Adjusted net loss was 64 cents per share, up from 45 cents per share a year earlier.

By both measures, Air Canada (TSX:AC.B) did better than consensus estimates compiled by Thomson Reuters. Analysts had expected, on the whole, a net loss of 77 cents per share and adjusted loss of 78 cents per share.

Elsewhere, GMP Capital Inc. (TSX:GMP) reported a net loss attributable to common shareholders of $2.3 million or four cents per diluted share in the first quarter, compared with net income of $22.5 million or 29 cents per diluted share in the same 2011 period. Revenue was $66.1 million, down 43 per cent.

Brookfield Office Properties Inc. (TSX:BPO) said its first-quarter profit was up 15 per cent from the same time last year, rising to US$352 million from US$306 million. Earnings per share rose to 62 cents from 54 cents.