TSX down ahead of ECB meeting, U.S. jobs data
A man walks past a building in Toronto that used to house the Toronto Stock Exchange on August 18 2011. THE CANADIAN PRESS/Aaron Vincent Elkaim
TORONTO - The Toronto stock market was slightly lower Wednesday as traders anticipate the announcement of stimulus measures to help the eurozone recovery and look to American employment numbers coming out at the end of the week.
The S&P/TSX composite index was well off early lows as gold stocks turned positive and losses in base mining stocks moderated, moving down points 9.26 at mid-morning to 14,725.43.
The Canadian dollar was down 0.35 of a cent to 91.31 cents as the Bank of Canada announced it was keeping its key rate unchanged at one per cent.
The currency was also pressured by data showing Canada's trade balance slipped into deficit territory during April. Statistics Canada said that Canada's merchandise exports declined 1.8 per cent while imports increased 1.4 per cent, taking Canada's trade balance with the world from a surplus of $766 million in March to a deficit of $638 million.
U.S. indexes were mixed amid a disappointing read on private sector job creation during May.
The Dow Jones industrials were down 24.76 points to 16,697.58, the Nasdaq gained 4.09 points to 4,238.17 and the S&P 500 index was 1.05 points lower to 1,923.19.
Payroll firm ADP reported Wednesday that the U.S. private sector created 179,000 jobs during May, the fewest number in four months.
That reading came in two days before the release of the U.S. non-farm payrolls report for May. Economists have forecast that about 219,000 jobs were created during May following a much stronger expected 288,000 gain in April.
The employment news was somewhat offset by other data showing the American non-manufacturing sector expanding at a faster than forecast clip. The Institute for Supply Management said its index rose to 56.3, the highest level since last August and above expectations for a read of 55.5.
Canadian job figures for May also come out Friday and economists expect about 21,000 jobs were created after the economy shed 29,000 the previous month.
Meanwhile, markets are counting on European Central Bank president Mario Draghi to announce measures Thursday aimed at giving a lift to the eurozone's weak recovery and saving the region from falling into a deflationary spiral that would choke off growth. Worries about deflation increased Tuesday in the wake of data showing that inflation in the eurozone came in at 0.5 per cent in May, down from 0.7 per cent in April. The latest data also showed that gross domestic product in the eurozone grew by a paltry 0.2 per cent in the first quarter.
Analysts are looking at a variety of options for the ECB, including an interest rate cut or a form of quantitative easing.
The base metals segment led decliners, down 0.4 per cent while July copper fell five cents to US$3.09 a pound.
The energy sector gave back 0.1 per cent while the July crude contract on the New York Mercantile Exchange gained 70 cents to US$103.36 a barrel.
The gold sector was the biggest gainer, ahead 0.5 per cent while August bullion climbed $3 to US$1,247.50 an ounce and the gold sector faded 0.12 per cent.
On the corporate front, Laurentian Bank of Canada (TSX:LB) shares edged up 13 cents to $47.71 as the bank posted a lower second-quarter profit of $31 million or 99 cents a share, compared with a profit of $33.8 million or $1.05 per share in the same quarter a year ago. Adjusted profit came in at $1.29 a share, five cents ahead of estimates. Laurentian also upped its quarterly dividend by a penny to 52 cents per share.