TORONTO - North American markets were headed for a weaker open Thursday and the Canadian dollar was down 0.14 of a cent to 98.17 cents US following a round of disappointing U.S. economic reports on unemployment and housing.
The Dow Jones industrial futures was down 16 points to 15,219, the S&P 500 futures index was down 2.70 points to 1,651.60, while the Nasdaq futures was up nine points to 3,010. This week, both the Dow and the S&P have closed at record highs.
Traders will be reacting to the release of three major data reports out of the United States that indicate that the U.S. economy may not be faring as well as many would like to believe.
The number of Americans seeking unemployment aid rose by 32,000 last week to a seasonally adjusted 360,000, the most since late March. The jump comes after applications fell to a five-year low.
The U.S. Labor Department said that the less volatile four-week average rose just 1,250 to 339,250, a level consistent with modest hiring.
The U.S. economy has added an average of 208,000 jobs a month since November. That's up from only 138,000 a month in the previous six months. Still, much of the job gains have come from fewer layoffs — not increased hiring
Meanwhile, U.S. builders broke ground on far fewer homes in April, one month after topping the one million mark for the first time since 2008. Applications for new construction rose to a five-year peak, evidence that the housing revival will be sustained.
The Commerce Department said U.S. builders started construction at a seasonally adjusted annual rate of 853,000 in April, a 16.5 per cent drop from the March pace of 1.02 million. Applications for building permits rose 14.3 per cent to a rate of 1.02 million, the highest since June 2008.
Homebuilders are benefiting from a sustained rebound in housing that began a year ago. Steady job growth, rock-bottom mortgage rates and rising home values have increased demand for new homes.
Wal-Mart Stores Inc. reported that its first-quarter profit rose 1.1 per cent as the world's largest retailer struggled with a sales slump in its namesake business. The company, based in Bentonville, Ark., blamed a payroll tax increase, delayed tax refunds and bad weather for the profit and sales results that missed Wall Street expectations. It also offered a profit outlook that came below analysts' projections.
Wal-Mart said it earned US$3.78 billion, or $1.14 per share in the quarter ended April 30. That compared with US$3.74 billion, or $1.09 per share, a year earlier. Sales rose 1 per cent to $113.43 billion. That figure excludes Sam's Club membership fees. The results fell short of Wall Street expectations for earnings of $1.15 per share on revenue of $115.78 billion.
Commodity prices continued to pull back. The June crude contract was down 28 cents to US$94.02 a barrel. June gold bullion dropped $23.40 to US$1,372.80 an ounce, while July copper dipped a penny to US$3.25 a pound.
Recent gains in the U.S. markets have limited the losses in the European markets, which have fallen since the European Union statistics office reported that nine of the 17 countries that use the euro are in recession, including France.
The combined economy of the 17 countries shrank by 0.2 per cent in the first three months of 2013 compared to the prior quarter.
Meanwhile, the economy of Germany, whose growth supports lesser economies in the region, expanded by a slight 0.1 per cent in the first quarter of the year, undershooting expectations of a 0.3 per cent rise.
Britain's FTSE 100 rose 0.1 per cent to 6,699.35. Germany's DAX fell 0.1 per cent to 8,351.80. France's CAC-40 lost 0.2 per cent to 3,973.65.
Earlier in Asia, Hong Kong's Hang Seng rose 0.2 per cent to 23,082.68. South Korea's Kospi added 0.8 per cent to 1,986.81. Japan's Nikkei lost 0.4 per cent to close at 15,037.24. Australia's S&P/ASX 200 shed 0.5 per cent to 5,165.70.