TORONTO — The Toronto stock market was lower Thursday, adding to the steep losses of the previous session as further weak employment data raised worries about slowing U.S. economic conditions.
The S&P/TSX composite index lost 48.97 points to 12,373.15 after a pair of soft economic reports and growing geopolitical risks sent the main index tumbling 260 points Wednesday, erasing TSX gains for the year. The TSX Venture Exchange fell 13.38 points to 1,025.24.
The Canadian dollar was off 0.12 of a cent to 98.45 cents US.
U.S. indexes were positive, clawing back a chunk of the losses Wednesday amid data showing the number of Americans seeking unemployment insurance rose to a four-month high last week.
The U.S. Labour Department reported that weekly applications increased 28,000 to a seasonally adjusted 385,000. It was the third straight weekly increase and the highest level since late November. The four-week average, a less volatile measure, rose to 354,250.
The Dow Jones industrial average gained 48.01 points to 14,598.36 after falling 112 points, the Nasdaq composite index edged up 1.63 points to 3,220.23 while the S&P 500 index was up 4.94 points to 1,558.63.
Markets registered sharp losses Wednesday after a disappointing read on private-sector job creation from payroll firm ADP had traders reconsidering their expectations for the government’s employment report.
The report, which comes out Friday, had been expected to show a total of 190,000 jobs were created in the U.S.
Other data showed the U.S. service sector expanding in March at a slower than expected pace.
Traders were also rattled by threats from North Korea.
Early Thursday, North Korea warned that its military has been cleared to attack the U.S. though experts say it has not demonstrated that it has missiles capable of long range or accuracy. Washington said it was working to defuse the situation.
Traders also considered a wind down of stimulus measures after Atlanta Federal Reserve Bank president Dennis Lockhart said the U.S. Fed will not rule out tapering quantitative easing, known as QE3, and announcing an end date. He said in an interview on CNBC that the tone on the U.S. economy is more optimistic than before.
Lockhart also acknowledged that the Fed recognizes there may be unintended consequences from program, which has involved the central bank printing money to buy up large amounts of bonds.
Commodity prices also added to the sharp drop Wednesday.
The gold sector again led TSX decliners, falling about 1.35% on top of a slide of almost five per cent on Wednesday, as the June gold contract on the Nymex lost $6.70 to US$1,546.80 an ounce. Barrick Gold Corp. (TSX:ABX) faded 42 cents to $26.67.
The energy sector declined 0.64% as the June crude contract on the New York Mercantile Exchange dropped $1.47 to US$92.98 a barrel after falling almost $3 on Wednesday. Canadian Natural Resources (TSX:CNQ) gave back 40 cents to $31.08.
Oil plunged after the U.S. Energy Department said crude oil supplies grew by 2.7 million barrels to 388.6 million barrels in the week ended March 29. The U.S. supply of oil is now 7.2% above year-earlier levels and the highest since July 27, 1990.
The base metals group was slightly higher while May copper was a cent lower at US$3.32 a pound following a five-cent slide. First Quantum Minerals (TSX:FM) gained 15 cents to $18.11.
Telecoms were the leading advancer with Telus Corp. (TSX:T) ahead 42 cents to $69.73.
Meanwhile, Japan announced that it is making a sweeping shift in its monetary policy that aims to raise inflation and get the world’s third-largest economy out of a long slump.
The Bank of Japan announced a policy overhaul intended to double the money supply and achieve a two per cent inflation target, with a time horizon of about two years.
On Asian markets, Tokyo’s Nikkei 225 stock index ended 2.2% higher.
But the advance in Tokyo didn’t ripple around Asia. South Korea’s Kospi dropped 1.2% as bellicose rhetoric between North Korea and the U.S. rattled the local market.
Australia’s resource-heavy S&P/ASX 200 lost 0.9%, hurt by drops in commodities prices. Hong Kong and mainland Chinese markets were closed for a public holiday.
European bourses were lower as the European Central Bank left its key interest rate unchanged at a record low of 0.75%.
The bank decided to hold off on further stimulus despite signs that a hoped-for recovery may be delayed for the group of 17 European Union countries that use the euro.
London’s FTSE 100 index dipped 0.74%, Frankfurt’s DAX dipped 0.18% while the Paris CAC 40 was down 0.12%.
On the corporate front, Lululemon Athletica Inc. (TSX:LLL) shares gained 80 cents to $66.06 after it said Wednesday that its chief product officer is leaving the retailer, just weeks after it pulled its black Luon pants from store shelves because they were too sheer. Specific reasons for Sheree Waterson’s departure were not disclosed.