TORONTO (CP) — The Toronto stock market closed slightly lower Friday, with gold stocks bearing the brunt of the pain as the price of the precious metal declined to a three-month low.
Toronto’s S&P/TSX composite index gave back 5.48 points to 13,553.30, while the loonie lost 0.73 of a U.S. cent to 75.21 cents U.S.
The global gold sector of the TSX was the lead decliner, slipping 3.2 per cent, as the December gold contract fell for a seventh straight session, settling at $16.50 to US$1,087.70 an ounce. That’s the lowest level that gold futures have been at in more than three months.
In New York, markets were mixed as solid jobs data made a December interest rate hike from the U.S. Federal Reserve seem increasingly likely.
The Dow Jones average of 30 stocks gained 46.90 points to 17,910.33, the broader S&P 500 index declined 0.73 of a point to 2,099.20 and the Nasdaq rose 19.38 points to 5,147.12.
The U.S. Labor Department said the economy added 271,000 jobs last month — the biggest gain so far this year — while unemployment declined to five per cent and hourly wages rose.
Craig Fehr, the Canadian market strategist at Edward Jones in St. Louis, called the U.S. jobs report “incredibly strong by all accounts.”
“I think we’re starting to see expectations for a December rate hike increase dramatically after today’s employment announcement,” said Fehr.
North of the border, Statistics Canada announced that the economy added 44,400 net jobs, although much of the gain stemmed from temporary public administration work most likely linked to the federal election.
Strong gains in trade and services jobs — core elements of the Canadian economy — were balanced out by layoffs in the oilpatch, said Fehr.
“That’s not surprising, but it continues to be a big drag on the overall economy,” said Fehr. “I think we’re out of the technical recession we saw in the first half, but I think growth is going to continue to be slow until we see any sort of stabilization or ultimately momentum in the energy space.”
On the commodity markets, the December crude contract slipped 91 cents at US$44.29 a barrel and the December contract for natural gas climbed by nearly a cent to US$2.37 per mmBtu.
Meanwhile, shares of TransCanada Corporation (TSX:TRP) slipped more than four per cent, or $1.93, to $43.32, after U.S. President Barack Obama rejected the company’s proposed Keystone XL pipeline.
“I think some of that expectation has been built in for some time though, and that’s probably why you’re not seeing a bigger reaction in the stock today,” said Fehr, adding that the looming U.S. presidential election leaves the project’s long-term outlook uncertain.
“I think the market is trying to weigh out the short-term impacts of what the administration did today, against the potential for there to be an administration change in the U.S. that could be a little bit more favourable to North American energy policy.”
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Alexandra Posadzki, The Canadian Press
