TSX takes a hit from US jobs numbers, Air Canada in focus
Toronto's main market plunged Friday around noon, as the weaker-than-expected US April jobs report took its toll.
As of shortly before noon, the S&P/TSX Composite was down 167.36 points, or 1.39%, to 11,847.54, while the more junior S&P/TSX Venture Composite fell 16.95 points, or 1.2%, to 1,399.59.
Copper and crude were in the slums, with crude oil for June delivery plunging more than 4.3% to 98.04 per barrel, and the base metal copper contract down 0.7% to $3.71 a pound.
Gold and silver futures both ticked higher, up 50 cents and 3.5 cents to $1,635.30 and $30.04 an ounce, respectively.
The Labour Department reported a net gain of 115,000 jobs, far below the 165,000 consensus estimate, according to Bloomberg.
But upward revisions to February and March job numbers, along with a drop in the unemployment rate to 8.1% from 8.2%, which was anticipated to remain steady, could offset some of the disappointment.
March figures were upwardly revised to a net gain of 154,000, up from a prior reading of 120,000, while February figures were revised higher to 259,000, up from 240,000 initially.
Average hourly earnings were flat, following a 0.2 percent gain in March. Analysts expected a 0.2 percent gain.
In Toronto, metals and mining, energy and financials saw the brunt of the sell-offs.
Energy stocks took a hit, with Canadian Natural Resources (TSE:CNQ), Suncor Energy (TSE:SU) and Talisman Energy (TSE:TLM) down 3.6%, 3.6% and 4.3%, respectively.
In mining, First Quantum Minerals (TSE:FM) was down 4.2%, while Lundin Mining (TSE:LUN) and copper focused Teck Resources (TSE:TCK.B) were lower by 5.2% and 2.66%, respectively.
Gold giants Goldcorp (TSE:G) and Barrick Gold (TSE:ABX) were up by 2.1% and 1.4%, respectively.
Financials were also down as insurer Manulife Financial (TSE:MFC) retreated more than 3% and Royal Bank of Canada (TSE:RY) dropped 2.2%.
In corporate news, Canadian airline Air Canada (TSE:AC.B) said Friday that surging fuel prices, labour disruptions and the demise of its former maintenance unit Aveos contributed to a sharp drop in first-quarter profits.
For the quarter that ended March 31, the airline reported a loss of $210-million, or 76 cents a share, compared with a loss of $19-million, or seven cents a share, during the same period last year.
Adjusted loss came in at 64 cents per share, up from 45 cents a year earlier, but ahead of analyst estimates for a loss of 79 cents, according to Bloomberg.
Mercator Minerals (TSE:ML) Friday said it was lowering its full-year production forecast for its flagship Mineral Park mine in Arizona, as it mined lower ore grades and mill throughput was impacted by the processing of harder ore.
The mine is now expected to produce approximately 89 million copper equivalent pounds during 2012, compared to the company’s prior guidance issued in January 2012, which estimated production of 90 to 100 million copper equivalent pounds. Shares were down around 11.7% Friday.
HSBC Bank Canada (TSE:HSB-C) said first-quarter profits jumped by 37.5 percent thanks to higher net interest income and lower operating costs.
GMP Capital (TSE:GMP) dipped into the red in the first quarter due to weaker performance in its capital markets segment, the investment dealer said Friday.
Toronto-based Torex Gold Resources (TSE:TXG) on Friday said it came “within a whisker” of its five-million ounce resource goal at its Mexican Morelos project, reporting 4.8-million in measured and indicated ounces of gold. Shares were up 1.2% Friday.
US/Europe
US equities also tumbled Friday on the weak April jobs report. The Dow was lately down 1.2%, with the Nasdaq and S&P 500 seeing larger percentage losses.
Analysts and economists will continue to debate how much of April's sluggishness was merely the outcome of atypical warm winter months moving forward job gains.
Analysts are saying Friday's jobs report is not weak enough to justify a third quantitative easing program, but it could lead the Fed to extend the Operation Twist program.
In corporate news, social networking site Facebook set a price range late Thursday of $28 to $35 per share for its initial public offering, upping the maximum size of its offering to $13.6 billion from a prior $5 billion estimate.
The eight-year-old social networking site, started at Harvard by Mark Zuckerberg, indicated an initial public offering price range that yielded a market valuation of $77 billion to $96 billion.
Insurer American International Group (NYSE:AIG) said late Thursday that its profit grew more than twofold in the first quarter.
After-tax operating income, which excludes certain investments and hedging activities, was $3.1 billion, or $1.65 per share. In the prior-year period, it was $2.1 billion, or $1.34 per share.
Analysts polled by FactSet were expecting on average adjusted net income of $1.19 per share.
LinkedIn’s (NYSE:LNKD) share price popped Friday after the business social networking company reported first quarter earnings more than doubled amid sales growth driven by strength across all of its key metrics.
First Solar (NASDAQ:FSLR) reported late Thursday a steep quarterly loss related to restructuring, and announced a new CEO.
GeoEye (NASDAQ:GEOY) has launched a friendly takeover bid to acquire rival DigitalGlobe (NYSE:DGI) in a cash and stock deal pegged at $792.3 million, the company said Friday.
Chesapeake Energy (NYSE:CHK) confirmed that the company is facing an inquiry from the Securities and Exchange Commission after revelations about CEO Aubrey McClendon's controversial compensation program.
European markets finished sharply lower Friday with shares in Germany leading the region. The DAX was down 1.99% while Britain's FTSE 100 was off 1.93% and France's CAC 40 fell lower by 1.79%.
