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Stockhouse @ the Bell: TSX continues tumble despite strong US job data

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

TORONTO _ North American stock markets are selling off for a second day, despite a relatively strong U.S. employment report on Friday.

The S&P/TSX composite index tumbled 112.23 points to 15,218.51 Friday afternoon after the U.S. Labor Department said 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 U.S. economy to add 225,000 jobs with unemployment rate holding steady.

The Canadian dollar edged lower 0.07 of a cent to 91.64 cents US.

New York's Dow Jones industrials fell 29.36 points to 16,533.94, the Nasdaq gave back 15.74 points to 4,354.03 while the S&P 500 index lost 0.81 of a point to 1,929.86.

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.

There were scattered earnings disappointments, but analysts have been generally pleased with the second-quarter earnings 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.

But there are also worries about the ripple effects from Argentina again defaulting on debt and tensions between the West and Russia over that country's support of Ukrainian rebels blamed for shooting down an airliner last month.

On top of it all, cracks in stock markets are appearing at a time when indexes are close to all time highs and the bull market has run practically non-stop for over five years.

``So, my view is that the market was looking for any excuse to sell, really,'' said John Stephenson, president and CEO at Stephenson and Co. Capital Management.

``You have tremendous amounts of cash sitting on the sidelines, at least in ''the retail population, and people are just bloody well nervous that they're going to lose their shirt, especially when they look at how far the market has come,`` Stephenson said.

The financial sector was a major source of weakness, down 1.43 per cent after Portugal's second-biggest lender posted a record US$4.68 billion loss and said it needed an increase in capital.

The energy sector was down 1.35 per cent as September crude lost 92 cents to US$97.26.

The base metals sector declined 1.3 per cent with September copper down one cent to US$3.23 a pound.

The TSX found support from a 1.15 per cent rise in the gold sector as investors looking for safety pushed December bullion up $12.30 to US$1,293.60 an ounce.

In earnings news Friday, pipeline company Enbridge (TSX:ENB) reported 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. Its shares were up 65 cents to $54.10.

Regional telecom company Bell Aliant (TSX:BA) reported a second-quarter profit of $72 million, or 32 cents per share, compared with $66 million, or 29 cents per share, a year ago. 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 seeking to take full ownership of the company through a $3.95-billion deal. Bell Aliant shares gained 12 cents to $31.02.

For news about small stocks that made big moves in Friday’s trading, please read the
Stockhouse Canadian Small and Micro-cap Stock Report

Tags: ETF

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