TSX idles as traders look for fed signals
TORONTO • The Toronto stock market closed little changed Monday as traders looked for direction following volatile trading last week.
The S&P/TSX composite index edged up 7.68 points to 13,794.18, as traders also took in acquisition activity over the weekend.
Meanwhile, the Canadian dollar fell US0.13¢ to US90.46¢.
U.S. indexes generally eked out minor gains as the Dow Jones industrial average rose 7.71 points to 15,801.79, Nasdaq was ahead 22.31 points to 4,148.17 and the S&P 500 climbed 2.82 points to 1,799.84.
The TSX and the Dow both advanced about 0.6% last week as the U.S. unemployment rate dipped to 6.6% from 6.7% — the lowest rate since the global financial crisis hit in late 2008 — even as labour force participation increased.
But on the way to that gain, markets were volatile amid discouraging manufacturing data from the U.S. and China. There was also nervousness about the problems some emerging markets are having in adapting to a world no longer awash in cheap money courtesy of stimulus from the Federal Reserve.
“We’re lacking a bit of direction,” said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.
“The data will, in fits and starts, provide some of that direction, but we had the big decline [early] last week, we had a rally and got everything condensed into a couple of trading days and now the market is taking a step back.”
Analysts thought Friday’s jobs data was strong enough to allow the Fed to continue reducing its bond purchases. It has already cut its purchase to US$65-billion a month, down US$20-billion, and analysts generally expect the Fed to continue to taper at US$10-billion a meeting.
Despite that expectation, investors are also looking ahead to comments from the new Federal Reserve chairwoman, Janet Yellen, before the U.S. Congress on Tuesday for any hint at a change in policy.
The TSX gold sector ran ahead about 3.33% in advance of earnings from several major miners this week while gold rose US$11.50 to US$1,274.80 an ounce.
Yamana Gold Inc. shares climbed 67¢, or 6.63%, to $10.78 as it said it expects its combined gold and silver output this year will be 16% above 2013 levels, while its cash costs per ounce remain relatively stable. The base metals sector was up 0.16% with March copper down US1¢ at US$3.22 a pound.
The energy sector was the leading decliner, down 0.62% even as March crude on the New York Mercantile Exchange edged US18¢ higher to US$100.06 a barrel, its highest close this year.
On the corporate front, International Forest Products Ltd. shares jumped 10.9% to $16.86 as the Vancouver-based company moved to acquire a Georgia lumber business in a US$180-million deal with Ilim Timber Continental SA.
HudBay Minerals Inc. is out to acquire all the shares of Augusta Resources Corp. that it doesn’t already own in a cash and stock deal worth about $540-million. August’s prime asset is its Rosemont copper deposit in Arizona.