Equities in Canada opened substantially lower on Friday, as falling gold price dragged down materials stocks and a strong rebound in U.S. job growth in June drove investors to pare bets of an aggressive interest rate cut by the Federal Reserve.
The S&P/TSX Composite Index slouched 84.97 points to open Friday at 16,503.88
The Canadian dollar eked up 0.4 cents to 76.24 cents U.S.
CIBC raised the target price on Norbord to $35.00 from $31.00. Norbord gained 50 cents, or 1.5%, to $32.90.
CIBC cut the target price on Hardwoods Distribution to $15.00 from $16.00. Hardwoods shares picked up five cents to $12.60.
CIBC cut the target price Canfor Pulp Products to $13.00 from $15.00. Canfor forfeited two cents to $11.15.
On the economic front, Statistics Canada said the economy shed a net 2,200 jobs in June after two months of gains and the unemployment rate edged up to 5.5% as more people joined the workforce.
The unemployment rate rose 0.1 percentage points to 5.5% as the number of people looking for work increased.
Also Friday morning, Western University released its Purchasing Managers’ Index for June. The PMI registered at 52.4, a drop from May's 55.9, and a sizable decrease from the reading of 63.1
ON BAYSTREET
The TSX Venture Exchange lost 2.17 points to 585.66
All but one of the 12 Toronto subgroups were lower in the first hour, as gold slipped 3.1%, materials were down 2.4%, and information technology, off 0.9%.
Only financials registered some life, and only 0.02% at that.
ON WALLSTREET
Stocks fell on Friday after the release of stronger jobs data dampened hope for easier Federal Reserve monetary policy.
The Dow Jones Industrial Average plummeted 125.05 points to start Friday at 26,840.95
The S&P 500 subtracted 17.69 points to 2,978.13.
The NASDAQ Composite lost 50.65 points to 8,119.58, as semiconductor stocks fell broadly.
Equities were on pace to notch solid weekly gains despite Friday’s losses. The Dow and S&P 500 were both up more than 1% for the week heading into the session. The NASDAQ had gained 2.1%.
Stock markets were closed Thursday for the Fourth of July holiday.
Gains in bank shares offset some of the losses. Citigroup, J.P. Morgan Chase, Bank of America and Wells Fargo all rose more than 0.5%.
In corporate news, Samsung warned its second-quarter earnings likely fell 56% on a year-over-year basis, citing weak demand for memory chips. The warning pressured semiconductor stocks like Qualcomm which fell 3.1%, and Broadcom, off 1.4%.
The U.S. economy added 224,000 jobs in June. Economists had forecast the U.S. added 165,000 jobs in June, after a stunningly low 75,000 jobs were created in May
Investors expected the Fed to cut rates later this month heading into Friday’s session. One expert said expectations for a rate cut in July were at 100%.
Prices for the benchmark 10-year U.S. Treasury were substantially lower, rocketing yields to 2.06%, from Wednesday’s 1.95%. Treasury prices and yields move in opposite directions.
Oil prices hiked 33 cents to $57.67 U.S. a barrel.
Gold prices dipped $29.50 to $1,391.40 U.S. an ounce.
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