TORONTO - The Toronto stock market closed lower Friday as traders weighed data showing another month of strong job creation in Canada while another report showed the Chinese economy slowing more than thought.
The S&P/TSX composite index edged 41.50 points lower to 11,694.67 amid sliding resource stocks.
The Canadian dollar was 0.08 of a cent higher at 99.91 cents US after Statistics Canada reported the economy cranked out 58,200 jobs, much higher than the 10,000 that economists had expected. The strong showing followed job growth in March of 82,300.
Still, the jobless rate edged up 0.1 of a percentage point to 7.3 per cent as more people were looking for work.
The strong employment showing suggested the Bank of Canada may move sooner than previously expected to hike interest rates. The currency had earlier traded lower as traders shunned risk and sought the safety of U.S. Treasuries.
The TSX Venture Exchange lost 9.73 points to 1,345.58.
The loss capped a week of steady declines that are partly a result of political chaos in Greece following inconclusive elections last Sunday. The vote produced no clear winner and negotiations to form a government failed, which likely means Greeks return to the polls next month.
New York markets were weak amid a shock announcement from JPMorgan that it lost US$2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money. The company’s stock plunged 8.75 per cent.
The Dow Jones industrial average gave back 34.44 points to 12,820.6.
The Nasdaq composite index inched up 0.18 of a point to 2,933.82 and the S&P 500 index was 4.6 points lower to 1,353.39.
TSX commodity stocks lost ground following the release of data showing growth in the Chinese economy slowing faster than previously believed.
Data released Friday showed that industrial production rose 9.3 per cent from a year earlier in April, slowing from a nearly 12 per cent increase in March.
Another report showed inflation also eased, to 3.4 per cent in April from 3.6 per cent the month before, giving the government greater leeway to ease policy to boost growth.
China’s economy grew 8.1 per cent in the first quarter of the year, a still robust rate but its slowest pace since 2009.
"Inflation has now been below four per cent for three months in a row," said Gavin Graham, president of Gavin Investment Strategy.
"So once there is some confidence on their part that that’s a sustainable slowdown and that the most important thing, which is social stability, is not being threatened by too rapid increases in . . prices (particularly food), then you might see they flick the switch and go back to starting to allow growth to accelerate."
The energy sector lost one per cent while commodities backed off following the release of the Chinese data with the June crude contract on the New York Mercantile Exchange down 95 cents to US$96.13 a barrel. Suncor Energy (TSX:SU) shed 55 cents to $28.75.
Metal prices also retreated with July copper off four cents to US$3.65 a pound. China is the world's biggest consumer of the metal which is viewed as an economic barometer as it is used in so many different industries. The base metals sector was down a shade over one per cent as Teck Resources (TSX:TCK.B) gave back 43 cents to $32.99 while Ivanhoe Mines (TSX:IVN) declined 51 cents to $9.48.
Bullion prices also faded with the June contract in New York down $11.50 to US$1,584 an ounce. The sector lost about two per cent and Barrick Gold Corp. (TSX:ABX) gave back 72 cents to C$37.09.
Blue chips helped provide lift to the TSX as the financial sector rose 0.4 per cent. Sun Life Financial (TSX:SLF) ran ahead 75 cents to $23.30.
Telecoms also advanced with Telus Corp. (TSX:T) up 89 cents to $59.83.
The resource-heavy TSX lost ground for a second straight week, losing 1.48 per cent. In addition to eurozone worries, energy and metal stocks continued to lose ground on worries that the global economy is downshifting, eroding demand for commodities. The disappointing Chinese data came on the same day the European Union estimated that the economy of the 17 countries that use the euro is in recession. The culprit is a debt crisis that has prompted savage spending cuts and a jump in unemployment to record highs.
"We just had the best couple of months for Canadian job numbers in 30 years, and really strong earnings numbers across most sectors," said Graham.
"Everything that isn’t Europe-related is doing very nicely, thank you, and the markets don’t care."
In earnings news, TMX Group Inc. (TSX:X) reported a 10 per cent drop in first-quarter net profits to $56.8 million Friday as the operator of Canada’s major financial markets saw a decline in quarterly revenues. Its shares were off three cents at US$47.22.