TSX Ends Lower On Global Cues, U.S. Jobs Data -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day gain to end lower on Friday, tracking a global sell-off after release of the U.S. employment report for August. The weaker than expected growth in U.S. employment has investors wondering what the Federal Reserve will do with interest rates when it holds its policy meeting later this month.

Almost all major sector of the main index ended in the red, with the heaviest losses among the mining, gold and energy stocks with commodity prices struggling.

Statistics Canada reported Friday that the Canadian unemployment rate rose to 7 percent as the economy generated only 12,000 jobs. Although anemic, the jobs growth beat estimates that said the economy would shed 5,000 jobs. The unemployment rate had been holding steady at 6.8 percent since January.

Markets in Europe ended firmly in negative territory at the end of the trading week. Markets were down ahead of the U.S. jobs report and dropped further after the release of the disappointing employment data.

Markets in the United States were also under pressure and settled sharply lower, with the major averages climbing off their worst levels late in the session but still firmly in the red. The Dow dropped 1.7 percent, the Nasdaq slid 1.1 percent, and the S&P 500 fell 1.5 percent.

The major averages all posted substantial losses for the week, with the Nasdaq plunging 3 percent, while the Dow and the S&P 500 plummeted 3.2 percent and 3.4 percent, respectively.

In some disappointing economic news, a Labor Department report on Friday showed much weaker than expected U.S. job growth in August, although the unemployment rate dropped to a new seven-year low. The economy generated only 173,000 jobs last month, but the unemployment rate dipped to 5.1 percent.

The weaker than expected growth in U.S. employment has investors wondering what the Federal Reserve will do with interest rates when it holds its policy meeting later this month. That leaves the Fed with a dilemma. Some members want to hike rates next week despite Chinese headwinds and risks to the U.S. recovery, while other are urging rates stay at zero for now.

The benchmark S&P/TSX Composite Index closed Friday at 13,478.31, down 118.10 points or 0.87 percent. The index scaled an intraday high of 13,509.95 and a low of 13,414.58.

On Thursday, the index closed up 51.16 points or 0.38 percent, at 13,596.41. The index scaled an intraday high of 13,706.76 and a low of 13,538.81.

The Diversified Metals & Mining Index plunged 5.29 percent, as First Quantum Minerals (FM.TO) plummeted 6.34 percent, Teck Resources Limited (TCK-B.TO) plummeted 9.33 percent, and HudBay Minerals Inc. (HBM.TO) surrendered 4.09 percent.

Lundin Mining Corp. (LUN.TO) plunged 4.09 percent. The company filed an updated NI 43-101 Technical Report for the Candelaria Copper Mining Complex in Chile.

Sherritt International (S.TO) fell 4.72 percent, having plummeted 5.36 percent yesterday,

The heavyweight Financial Index plummeted 1.22 percent, as Bank of Montreal (BMO.TO) fell 1.07 percent, National Bank of Canada (NA.TO) dropped 0.86 percent, and Royal Bank of Canada (RY.TO) shed 1.49 percent.

Toronto-Dominion Bank (TD.TO) fell 1.31 percent, Bank of Nova Scotia (BNS.TO) dropped 0.97 percent, and Canadian Imperial Bank of Commerce (CM.TO) lost 0.96 percent.

Crude oil ended lower after some mixed U.S. jobs data raised concerns over its impact on energy demand and the possible delay in the Federal Reserve plans for hiking interest rates.

The Energy Index shed 0.67 percent, with U.S. crude oil futures for October delivery, the most actively traded contract, dropping $0.70 or 1.5 percent, to settle at $46.05 a barrel on the New York Mercantile Exchange Friday.

Among energy stocks, Crescent Point Energy Corp. (CPG.TO) gained 0.97 percent, Canadian Natural Resources Limited (CNQ.TO) shed 3.14 percent, Cenovus Energy (CVE.TO) gathered 1.11 percent, and Encana Corp. (ECA.TO) moved up 1.41 percent.

Suncor Energy Inc. (SU.TO) inched up 0.14 percent, while Canadian Oil Sands (COS.TO) fell 2.94 percent.

Gold futures ended lower due to the uncertainty surrounding the potential U.S. rate hike in September, following the disappointing August employment report.

The Gold Index gained 0.24 percent, with gold for December delivery dropping $3.10 or 0.3 percent, to settle at $1,121.40 an ounce on the New York Mercantile Exchange Friday.

Yamana Gold Inc. (YRI.TO) gained 0.44 percent, while IAMGOLD Corp. (IMG.TO) jumped 3.50 percent.

Among other gold stocks, Barrick Gold Corp. (ABX.TO) dropped 0.35 percent, Goldcorp Inc. (G.TO) added 0.68 percent, and Eldorado Gold Corp. (ELD.TO) dropped 0.82 percent.

The Capped Materials Index dropped 0.65 percent, as Agnico Eagle Mines Limited (AEM.TO) gained 0.60 percent, Agrium Inc. (AGU.TO) fell 1.27 percent, and Potash Corp. of Saskatchewan Inc. (POT.TO) dropped 0.85 percent.

The Capped Health Care Index jumped 1.20 percent, as Valeant Pharmaceuticals International (VRX.TO) gained 1.06 percent.

Among other healthcare stocks, Concordia Healthcare Corp. (CXR.TO) gathered 3.08 percent and Extendicare Inc. (EXE.TO) fell 1.56 percent.

The Capped Information Technology Index declined 0.95 percent, as BlackBerry Limited (BB.TO) dropped 2.03 percent after agreeing to acquire mobile security provider Good Technology for $425 million in cash.

Among other tech stocks, Descartes Systems Group (DSG.TO) inched up 0.17 percent and Avigilon Corp. (AVO.TO) jumped 6.31 percent, after having dived 5.17 percent yesterday.

Constellation Software (CSU.TO) fell 0.87 percent after its Perseus division agreed to acquire the Market Leader business from the Zillow Group.

The Capped Telecommunication Index dropped 0.51 percent, as Rogers Communication (RCI-B.TO) fell 0.36 percent, BCE Inc. (BCE.TO) dipped 0.41 percent, TELUS Corp. (T.TO) shed 0.53 percent, and Manitoba Telecom Services Inc. (MBT.TO) fell 0.72 per share.

The Capped Industrials Index fell 0.89 percent, as Bombardier (BBD.B.TO) dropped 1.67 percent and Finning International Inc. (FTT.TO) dipped 1.12 percent. Air Canada jumped 4.29 percent and AutoCanada (ACQ.TO) dropped 1.46 percent.

On the economic front, Statistics Canada reported that Canadian labor productivity decreased by 0.6 percent in the second quarter. The result was in line with the expectations of economists. The first quarter result was also revised to a decline of 0.5 percent, from the initial report of a 0.1 percent drop.

From the U.S., the Labor Department said non-farm payroll employment climbed by 173,000 jobs in August, but well below the increase of 220,000 jobs anticipated by economists. Meanwhile, unemployment rate edged down to 5.1 percent in August from 5.3 percent in July, while economists expected the rate to dip to 5.2 percent.

Germany's factory orders declined at the fastest pace in six months in July, data from Destatis revealed Friday. Factory orders dropped 1.4 percent in July from the previous month, which was the biggest fall since January when it slid 2.6 percent.

Economists had forecast orders to fall at a slower pace of 0.6 percent. Orders had increased 1.8 percent in June and decreased 0.3 percent in May.

Germany's construction activity expanded at the slowest pace in seven months in August, data from Markit showed Friday. The seasonally adjusted Purchasing Managers' Index fell to 50.3 in August from 50.6 in July. This was the least marked increase in seven months.

French consumer confidence held steady in August, defying economists' expectations for an increase, figures from the statistical office INSEE showed Friday. The consumer confidence index came in at 93.0 in August, the same reading as in July. Economists had expected the index to rise to 94.0.