TSX choppy on Spain worries weak US jobs data

TORONTO — The Toronto stock market was negative Thursday amid lower commodities and while Spain and Italy felt the pressure of higher borrowing costs.The S&P/TSX composite index lost 26.5 points to 11,471.38 while the TSX Venture Exchange gained 7.11 points to 1,250.99.The Canadian dollar was up 0.37 of a cent to 97.53 cents US.U.S. markets were positive with the Dow Jones industrial average ahead 17.71 points at 12,514.09.The Nasdaq composite index slipped 9.9 points to 2,808.71 and the S&P 500 index added 0.52 of a point to 1,315.4.There was also caution ahead of Greek elections on Sunday. Greeks will determine whether the country sticks to its highly unpopular austerity program of tax hikes and spending cuts that a previous government accepted in order to receive billions of euros in bailouts that are keeping the country afloat.If political parties are elected that favour reneging on the program, the international bailout and Greece’s membership in the euro currency union would be at risk.Spain’s 10-year borrowing rate inched up to 6.71 per cent from 6.67 per cent. That is close to the seven per cent rate considered unsustainable. Greece, Portugal and Ireland were forced to seek financial rescue packages after rising to that level.Ratings agency Moody’s downgraded Spain’s government debt three notches late Wednesday, placing it one level above junk status. Moody’s said the downgrade was due to the offer from eurozone leaders of up to C100 billion to Spain to prop up its failing banking sector, which the ratings agency believes will add considerably to the government’s debt burden.The downgrade means that even fewer investors will buy Spanish debt as organizations such as pension funds are prevented from investing in assets with such a low score.The debt crisis contagion continued to spread to Italy. Its 10-year borrowing rate rose to 6.07 per cent from 6.02 per cent, and the interest rate on its one-year bonds also rose sharply.And in a bond auction, Italy paid a 5.3 per cent interest rate, up from 3.91 per cent last month, to sell C3 billion in three-year paper. The sale was fully subscribed.Traders seemed disinclined to make big moves on commodity markets as well.The base metals sector led declines, down 1.18 per cent with July copper off a penny at US$3.33 a pound. Teck Resources (TSX:TCK.B) gave back 44 cents to C$31.88.The energy sector dipped 0.17 per cent with the July crude contract on the New York Mercantile Exchange down six cents at US$82.56 a barrel. Suncor Energy (TSX:SU) fell 15 cents to C$28.71.The gold sector was down about 0.7 per cent as August gold gave back $7.70 to US$1,611.70 an ounce. Goldcorp Inc. (TSX:G) faded 59 cents to C$40.64.The tech sector fell 1.11 per cent with Research In Motion Ltd. (TSX:RIM) down 36 cents at $10.64.Elsewhere, Finnish cellphone maker Nokia Corp. (NYSE:NOK) will lay off 10,000 jobs globally and close plants by the end of 2013 in a further drive to save costs. Nokia is fighting fierce competition from Apple Inc.’s iPhone and other makers using Google Inc.’s popular Android software, including Samsung Electronics Co. and HTC of Taiwan. Nokia shares tumbled 41 cents or 14.7 per cent to US$2.38 in New York.Meanwhile, German Chancellor Angela Merkel acknowledged that Europe’s worsening debt crisis will dominate this weekend’s summit of the world’s 20 most important economies in Mexico. But she stuck to her conviction that the region’s crisis can only be solved by keeping a tight rein on government finances and introducing structural reforms.European bourses were sharply lower with London’s FTSE 100 index down 0.64 per cent, Frankfurt’s DAX down 0.54 per cent and the Paris CAC 40 off 0.36 per cent.Earlier in Asia, Japan’s Nikkei 225 index slipped 0.2 per cent, Australia’s S&P/ASX 200 dropped 0.5 per cent, Hong Kong’s Hang Seng shed 1.2 per cent and the Shanghai Composite Index fell one per cent. But South Korea’s Kospi gained 0.7 per cent.In earnings news, shares in travel and vacation company Transat A.T. Inc. (TSX:TRZ.B) lost 23 cents to $4.13 after it posted a net loss of $13.2-million or 35 cents for its latest quarter. Overall revenue rose by $111 million to $1.2 billion due an acquisition in Transat’s North American arm, offset by lower selling prices and higher costs. Analysts had been expecting a smaller loss.Hockey equipment company Bauer Performance Sports Ltd. (TSX:BAU) is buying Cascade Helmets Holdings Inc. for US$64 million in a bid to expand its lacrosse business and acquire the company’s patented helmet technology. Bauer shares were off 11 cents at $7.95.

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