Stocks down in early trading on China, Euro manufacturing data

Canadian Press, The Canadian Press
0 Comments| January 2, 2014

TORONTO _ The Toronto stock market started the 2014 trading year in the red as resource stocks pulled back in the wake of a mixed bag of manufacturing data from China and the eurozone.

The S&P/TSX composite index fell 45.43 points to 13,576.12 while the Canadian dollar was ahead 0.15 of a cent to US 94.17 cents US.

U.S. indexes were also in the red despite further evidence that U.S. layoffs are low and hiring will likely remain steady. The Labor Department said that the number of Americans seeking unemployment benefits dipped 2,000 last week to a seasonally adjusted 339,000.

Applications are a proxy for layoffs and appear to have stabilized near pre-recession levels at a level consistent with solid hiring.

The Dow Jones industrials dropped 82.39 points to 16,494.27, the Nasdaq declined 28.71 points to 4,147.88 and the S&P 500 index was down 9.77 points to 1,838.59.

Two manufacturing surveys released Thursday showed Chinese activity slowed in December. The China Federation of Logistics & Purchasing said its purchasing managers index declined to 51 from November's 51.4 on a 100-point scale. Numbers above 50 show an expansion. A separate survey by HSBC Corp. declined slightly to 50.5 from 50.8 in November.

Meanwhile, the eurozone manufacturing purchasing managers index in December was confirmed at 52.7 as expected.

However, results across the region were mixed on a country-by-country basis.

The French reading was revised slightly down, but the German reading was revised marginally higher. Italy's PMI edged higher while Spain's reading cleared the 50-mark, which signals expansion.

``The overall eurozone number also backs hopes for a strengthening of economic activity this year, which is encouraging,'' observed a commentary from Action Economics.

Traders also looked ahead to the release later in the morning of the Institute for Supply Management's latest reading on the American manufacturing sector.

Economists expect the index to show a slight slowdown in expansion, coming in at 57, down slightly from 57.3 in November.


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