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North American stocks look to extend sharp losses amid US job data

Canadian Press, The Canadian Press
0 Comments| August 1, 2014

TORONTO _ North American stock markets looked to extend the sharp losses already registered as August trading got under way amid U.S. employment data that slightly missed expectations.

The U.S. Labor Department said Friday the American economy added 209,000 jobs last month, while the unemployment rate ticked up 0.1 of a point to 6.2 per cent.

Generally, economists had looked for the economy to add 225,000 jobs with unemployment rate holding steady.

U.S. job growth figures for May and June were revised upward.

The Canadian dollar was down 0.14 of a cent to 91.57 cents US.

U.S. futures improved after the report came out an hour before the market open with the Dow Jones industrials down 17 points to 16,477, the Nasdaq futures dipped 1.3 points to 3,883.5 while the S&P 500 futures off 1.5 points to 1,923.25.

Stock markets tumbled Thursday in their biggest one-day slide since early February, but analysts were hard-pressed to identify a single reason for the drop. The TSX fell 194 points while the Dow industrials plunged 317 points, wiping out all gains year-to-date. However, the Toronto market is still close to its latest record high and up 13 per cent year-to-date.

Markets were hit by disappointing earnings news Thursday by the likes of Nike, Valeant Pharmaceuticals, Barrick Gold, and Suncor Energy.

But analysts have been generally pleased with the second-quarter earnings parade over the last couple of weeks.

In the background are worries that strong U.S. economic growth could result in the Federal Reserve hiking rates earlier than expected.

Argentina has moved into a debt default for the second time in 13 years and there are also worries about the effect of sanctions levied against Russia for its support of Ukrainian rebels.

There was also positive news from China's manufacturing sector.

The Chinese government's official purchasing managers index came in above expectations at 51.7 in July, up 0.7 of a point from June, the highest reading in 27 months. And to complement it, the HSBC manufacturing PMI was lowered to 51.7 from the preliminary estimate of 52.0, but that is still the best level in 18 months. Taken together, the measures point to improving economic activity.

In earnings news Friday, pipeline company Enbridge (TSX:ENB) reported a second-quarter net profit of $756 million, or 91 cents per diluted share, compared with $42 million, or five cents per diluted share, in the same quarter of 2013. Cash flow from operating activities was $812 million, down from $937 million year-over-year. Adjusted earnings rose to $328 million or 40 cents per share from $306 million, or 38 Canadian cents, a year earlier, a penny better than expected.

Regional telecom company Bell Aliant (TSX:BA) reported a higher second-quarter profit of $72 million, or 32 cents per share, compared with $66 million, or 29 cents per share, in the same quarter of 2013. Revenues were down at $683 million from $692 million year-over-year. BCE Inc., which already owns 44 per cent of Bell Aliant, recently announced it's going to take full ownership of the Halifax-based company through a $3.95-billion deal.

On the commodity markets, September crude lost 53 cents to US$97.64.

December gold gained $5.80 to US$1,288.60 an ounce and September copper lost a cent to US$3.22 a pound.


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