The Toronto stock market was lower Monday as buying sentiment continued to take a hit from disappointing US jobs data Friday and word from the International Monetary Fund that it was downgrading its economic forecast.
The Samp;P/TSX composite index lost 63.69 points to 11,596.26 while the TSX Venture Exchange added 2.77 points to 1,214.12.
“We seem to be stuck in this rut,” said Allan Small, senior adviser at DWM Securities. “I guess a positive for me is that the market is actually quite resilient. If you look at the halfway point, the TSX is pretty much flat for the year. But US markets are fantastic.”
The Canadian dollar moved down 0.15 of a cent to 98.02 cents US
US indexes were firmly in the red after the data showed that the US economy only cranked out an average of 75,000 jobs a month during the second quarter, down sharply from 226,000 in the January-March period.
IMF managing director Christine Lagarde didn’t mention exactly how much the IMF’s next forecast will be trimmed, but her warning during a speech in Japan and the US jobs data were enough to further persuade traders that economic growth is faltering around the globe.
The Dow Jones industrials fell 60.36 points to 12,712.11. The Nasdaq composite index was down 8.13 points to 2,929.2 and the Samp;P 500 index lost 4.76 points to 1,349.92.
The weak jobs report on Friday increases pressure on the US Federal Reserve to implement monetary stimulus measures known as quantitative easing. The release later this week of the minutes of the last Fed meeting might show whether the Fed is leaning toward more stimulus to boost growth.
The chronic eurozone debt crisis also chipped away at investor confidence as Spain’s borrowing costs rose to dangerously high levels. The interest rate, or yield, on the country’s 10-year bonds rose above seven per cent this morning, a level that market-watchers consider unsustainable.
The crisis has centred on Spain in recent weeks as the country’s banks struggle under the weight of toxic loans and assets following the collapse of the country’s property market.
Resource stocks led decliners even as commodity prices advanced after diminished demand prospects pushed prices for oil and metals down sharply on Friday.
The base metals sector fell 1.85 per cent as the September copper contract on the New York Mercantile Exchange edged up a penny to US$3.41 a pound following an eight-cent fall. First Quantum Minerals (TSX:FM) fell 53 cents to $18.10.
Teck Resources Ltd. (TSX:TCK.B) said Monday it has temporarily withdrawn its social and environmental impact assessment application for the Quebrada Blanca Phase 2 copper project in Chile. Teck declined 76 cents to C$31.13.
The energy sector was off 0.44 per cent as the August crude contract on the New York Mercantile Exchange was ahead $1 to US$85.45 a barrel after sliding $2.77 at the end of last week. Imperial Oil (TSX:IMO) gave back 31 cents to C$42.48 and Talisman Energy (TSX:TLM) dropped 14 cents to $11.43.