TSX Ends Lower After U.S. Jobs Data -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower for a second straight session Friday, amid slew of mixed U.S. economic data including a somewhat disappointing U.S. monthly jobs report. The market was also weighed down by geopolitical tensions and concerns about the European banking system, along with the news about Argentina missing its debt repayment deadline.

A Labor Department report on Friday showed employment in the U.S. rose less than expected in July, after reporting a sharp jump in employment the previous month. Meanwhile, unemployment in July increased as compared to the previous month.

However, the data does cement expectations the Federal Reserve will hold the interest rates at current levels for an extended period.

Among other economic news, a report from the U.S. Commerce Department showed personal income and spending to have increased in line with economist estimates in the month of June. Meanwhile, activity in the U.S. manufacturing sector expanded at a notably faster rate in July, with the index of activity climbing to a three-year high, a report from the Institute for Supply Management showed Friday.

U.S. construction spending unexpectedly saw a sharp drop in June, with spending on public construction indicating a substantial decrease, a Commerce Department report showed Friday.

The S&P/TSX Composite Index closed Friday at 15,215.26, down 115.48 points or 0.75 percent. The index scaled a intraday high of 15,371.76 and a low of 15,130.85.

On Wednesday, Canadian stocks ended sharply lower, snapping a seven-day winning streak on declining global equity markets.

Crude oil pared losses but still ended lower on demand growth concerns after some disappointing economic data from the U.S. with employment rising less than expected in July, even as unemployment increased.

The Energy Index dived 1.58 percent, with U.S. crude oil futures for September delivery dropping $0.29 or 0.3 percent to close at $97.88 a barrel Friday on the Nymex.

Energy stock Canadian Oil Sands Ltd (COS.TO) edged up 0.21 percent after reporting second-quarter net earnings of C$176 million or C$0.36 per share, compared with C$219 million or C$0.45 per share last year.

Mid-streak oil stock Enbridge Inc. (ENB.TO) added 0.84 percent after reporting second-quarter earnings of C$756 million or C$0.91 per share, up from C$42 million or C$0.05 per share, a year ago. Adjusted earnings was C$328 million or C$0.40 per share, for the quarter.

Among other stocks in the energy sector, Suncor Energy Inc. (SU.TO) shed 2.99 percent, Canadian Natural Resources Limited (CNQ.TO) declined 3.32 percent, Talisman Energy (TLM.TO) shed 0.70 percent, Encana Corp. (ECA.TO) dropped 1.79 percent, and Cenovus Energy (CVE.TO) gained 0.12 percent.

The Financial Index shed 1.09 percent with Toronto-Dominion Bank losing 0.86 percent, National Bank of Canada (NA.TO) surrendered 0.94 percent, Bank of Nova Scotia (BNS.TO) slipped 0.72 percent, Canadian Imperial Bank Of Commerce (CM.TO) lost 0.98 percent, Royal Bank of Canada (RY.TO) fell 1.39 percent, and Bank of Montreal (BMO.TO) dropped 1.56 percent.

The Capped Healthcare Index slipped 0.09 percent with Valeant Pharmaceuticals International, Inc. (VRX.TO) up 1.02 percent and Extendicare (EXE.TO) down 0.13 percent.

Catamaran Corp. (CCT.TO) dropped 1.13 percent after reporting second-quarter net income of $71.4 million or $0.34 per share up from $63.4 million, or $0.31 per share in the same quarter last year. Adjusted earnings per share increased 10 percent to $0.54 per share from $0.49 per share last year.

Gold futures ended higher after some disappointing economic data from the U.S. with employment rising less than expected in July, even as unemployment increased.

Global Gold Index gained 1.38 percent, with gold futures for August delivery adding $12.30 or 1.0 percent to close at $1,293.60 an ounce on the Nymex Friday.

Among gold stocks, Detour Gold Corp. (DGC.TO) surged 8.62 percent, while Yamana Gold Inc. (YRI.TO) added 1.72 percent, Barrick Gold Corp. (ABX.TO) up 0.76 percent, Goldcorp Inc. (G.TO) added 1.41 percent, Eldorado Gold Corp. (ELD.TO) added 6.92 percent.

The Capped Materials Index gained 0.16 percent on gold mining stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) slipping 1.24 percent.

The Diversified Metals & Mining Index added 2.27 percent, with First Quantum Minerals Ltd. (FM.TO) losing 3.09 percent, Lundin Mining Corp. (LUN.TO) up 2.59 percent and Teck Resources Limited (TCK.B.TO) surrendered 0.54 percent.

The Capped Industrials Index slipped 0.76 percent, with Bombardier Inc. (BBD.B.TO) up 1.88 percent and Air Canada (AC.B.TO) slipping 3.23 percent.

The Capped Telecommunications Index lost 0.58 percent, with Telus Corp. (T.TO) down 0.26 percent, BCE Inc. (BCE.TO) down 0.53 percent, and Rogers Communications Inc. (RCI.B.TO) lost 0.56 percent.

Bell Aliant Inc. (BA.TO) edged up 0.13 percent after reporting net earnings of $72 million for the second quarter, compared to net earnings of $66 million in the corresponding quarter last year.

The Information Technology Index gained 0.29 percent, with BlackBerry Limited (BB.TO) down 0.39 percent, Avigilon Corp. (AVO.TO) dived 5.16 percent, and Open Text Corp. (OTC.TO) down 0.90 percent.

Shares of power generator Fortis Inc. (FTS.TO) are down 3.81 percent, after having had reported second quarter net earnings attributable to common equity shareholders of $47 million, or $0.22 per common share, compared to $54 million, or $0.28 per common share, for the same quarter last year.

In economic news from the U.S., a report from the Labor Department showed that a less than expected 209,000 jobs were added in July. The consensus estimate called for an addition of 233,000 jobs after non-farm payrolls expanded by 288,000 in the previous month. Meanwhile, unemployment edged up to a seasonally adjusted 6.2 percent in July, from 6.1 percent in the previous month.

A report from the U.S. Commerce Department showed personal income increased by 0.4 percent in June, matching the increase seen in the previous month. Personal spending rose by 0.4 percent in June following an upwardly revised 0.3 percent increase in May.

Data from Thomson Reuters and the University of Michigan showed U.S. consumer sentiment to have deteriorated less than previously estimated in the month of July, with the final reading coming in at 81.8, compared to the mid-month reading of 81.3.

A report from the Institute for Supply Management showed activity in the manufacturing sector expanded at a notably faster rate in July, with the ISM Purchasing Managers Index climbing to 57.1, up from 55.3 in June.

A Commerce Department report said construction spending in the U.S. tumbled by 1.8 percent to an annual rate of $950.2 billion in June from the revised May estimate of $967.8 billion. The sharp drop came as a surprise to economists, who had expected construction spending to increase by about 0.5 percent.

From Asia, China's manufacturing PMI rose to 51.7 from 51.0 in July, according to an official government data. The reading comes in ahead of economists' expectations of 51.4. Nonetheless, China's HSBC final manufacturing PMI dropped to 51.7 last month from 52.0. Economists expected the index to remain unchanged.

From Europe, British manufacturing sector logged its weakest growth in a year in July as growth in output and new orders eased from June, a survey by Markit Economics and the Chartered Institute of Purchasing and Supply showed Friday. The Markit/CIPS manufacturing Purchasing Managers' Index fell to 55.4 in July from a revised 57.2 in June. Economists expected the index to come in at 57.2, down from June's original estimate of 57.5.