05/02/2012 10:58 EDT

TSX Drops 100 Points As Bad News Flows In From U.S., Europe


TORONTO -- The Toronto stock market fell more than 100 points mid-morning Wednesday amid disappointing economic data from the U.S. and Europe and earnings misses.

Buying sentiment also took a hit as other data from a private U.S. payroll firm indicated slowing American job growth.

The S&P/TSX composite index fell 134.02 to 12,198.77 and the TSX Venture Exchange lost 5.21 points to 1,426.47

Barrick Gold Corp. (TSX:ABX) shares fell 99 cents to $38.90 as the world's biggest gold miner reported quarterly net earnings of $1.03 billion, or $1.03 per share, up from US$1 billion or $1 per share a year earlier. But Barrick's adjusted profit was US$1.11 a share, which missed analyst estimates by two cents. Barrick is also raising its dividend 33 per cent to 20 cents a share.

Loblaw Companies Ltd. (TSX: L) shares dropped 31 cents to $33 as its first-quarter profit was down 22 per cent from the same time last year to $126 million or 45 cents per share, before adjustments. Revenue was up about one per cent, rising just above $6.9 billion for the quarter.

The Canadian dollar was down 0.26 of a cent to 101.18 cents US.

U.S. markets were lower after payroll firm ADP reported that the American economy cranked out only 119,000 private sector jobs during April, well below the consensus estimate of 170,000. The report was released two days before the non-farm payrolls report for April comes out. Economists are looking for the economy to have created about 160,000 jobs last month.

The Dow Jones industrial average declined 80.53 points to 13,198.79.

The Nasdaq composite index was down 16.94 points to 3,033.5 and the S&P 500 index slipped 11.14 points to 1,394.68.

Prices for oil and metals backtracked amid reports showing that manufacturing activity across the eurozone shrank at a faster pace than previously estimated in April.

The final April Markit purchasing managers index fell to 45.9 from a reading of 47.7 in March and was below an earlier estimate of 46. A reading of less than 50 indicates a contraction in activity.

The data showed accelerating downturns for Italy, Spain and Greece.

But even eurozone powerhouse Germany saw shrinking activity as its manufacturing PMI fell to a 33-month low at 46.2.

"Now it is only the first month of the quarter but this is clearly a bad start and if maintained, suggests a deepening second quarterly decline in economic activity (aka: recession),'' said BMO Capital Markets senior economist Jennifer Lee.

"And that is bad news for the region that just reported a 10.9 per cent unemployment rate in March, a level not seen in 15 years.''

The base metals sector led declines on the TSX. It moved down 2.35 per cent as prices for copper, viewed as an economic bellwether since the metal is used in so many industries, also fell. The May contract down seven cents to US$3.77 a pound. Ivanhoe Mines (TSX:IVN) shed 33 cents to $11.02.

The energy sector fell 1.7 per cent as demand concerns sent the June crude contract on the New York Mercantile Exchange down 54 cents to US$105.62 a barrel. Cenovus Energy (TSX:CVE) fell 91 cents to $35.26.

The tech sector also weighed with shares in Research In Motion Ltd. (TSX:RIM) down 63 cents or 4.73 per cent to $12.68. The drop comes on top of a drop of almost six per cent Tuesday after RIM unveiled its new BlackBerry 10 operating system.

The gold sector declined 1.26 per cent with bullion prices also lower as the June contract falling $13.20 to US$1,649.20 an ounce. Goldcorp Inc. (TSX:G) faded 59 cents to $37.50.

Financials also contributed to the negative session with Royal Bank (TSX:RY) down 68 cents to $56.17.

Also depressing commodity prices was a survey of purchasing managers by HSBC that shows China's manufacturing contracted in April for the sixth straight month. HSBC said Wednesday that its purchasing managers index for April was 49.3, up from 48.3 in April. The index has remained below 50, the level indicating expansion, since October.

The HSBC survey tends to reflect private and export-sector activity more strongly than an official index released Tuesday that showed manufacturing gaining last month.

European bourses were mixed with London's FTSE 100 index down 0.97 per cent, Frankfurt's DAX lost 0.87 per cent and the Paris CAC 40 slipped 0.11 per cent.

Elsewhere in earnings news, electricity and natural gas distributor Fortis Inc. (TSX:FTS) reported quarterly net earnings of $121 million or 64 cents per common share. That compared with $116 million, or 66 cents per share in the first quarter of 2011 and its shares dipped 10 cents to $34.09.

And paper producer Domtar Corp. (TSX:UFS) announced a 29 per cent increase in its quarterly quarterly dividend to 45 cents. Its shares rose 16 cents to $86.34.

On Tuesday after the close, Yamana Gold Inc. (TSX:YRI) reported earnings of US$170 million or 23 cents per share for its latest quarter, up from $148.2 million or 20 cents per share a year ago. Revenue totalled $559.7 million, up from $476.1 million. Yamana shares gave back 32 cents to $14.21.