TORONTO - The Toronto stock market closed sharply lower Friday at the end of another negative week as rising worries about slowing economic conditions pushed stocks lower across most sectors.
The S&P/TSX composite index tumbled 171.74 points to 13,084, while the TSX Venture Exchange was off 23.65 points at 1,934.93.
"There are some very fundamental reasons why, particularly the Canadian market, is pulling back," said Chris King, portfolio manager at Morgan Meighen and Associates.
In addition to a loss in momentum of U.S. growth, "China is slowing, India is slowing their growth and they're doing it intentionally (to fight inflation). We still have high commodity prices putting a damper on the economy. So those are very valid reasons for a retraction in equity prices. But I think at this point they're a little bit overdone."
A stronger U.S. currency and sliding oil prices pushed the Canadian dollar lower despite jobs data for May that came in better than expected.
The loonie was off of a cent at cents US as Statistics Canada said 22,300 new jobs were created last month, slightly above consensus estimates following the previous month's strong 58,000 gain. The unemployment rate fell 0.2 percentage points to 7.4 per cent.
The energy sector fell almost two per cent as oil prices backed away following two strong days of advances that followed a surprise decision by the OPEC cartel to maintain current production levels.
The July contract on the New York Mercantile Exchange lost $2.64 to US$99.29 a barrel amid a stronger U.S. dollar and reports that Saudi Arabia is set to ramp up oil production. Suncor Energy (TSX:SU) lost 73 cents to C$38.07 while Cenovus Energy (TSX:CVE) gave back $1.12 to $33.47.
The base metals sector lost three per cent as metal prices also declined with the July copper contract on the Nymex down five cents to US$4.06 a pound. Teck Resources (TSX:TCK.B) lost $1.99 to C$45.51.
Taseko Mines Ltd. (TSX:TKO) fell 33 cents to $4.52 as the miner saw its first-quarter profit drop to $5.8 million compared to $77.1 million a year ago when the company recorded a large one-time gain. Revenue fell more than 20 per cent and costs at its Gibraltar mine rose.
Bullion was lower with the August contract off $13.50 to US$1,529.20 an ounce. Gold stocks also fell back with Eldorado Gold Corp. (TSX:ELD) fading 31 cents to C$13.78 while Barrick Gold Corp. (TSX:ABX) was down 63 cents to C$42.62.
The financials group was down one per cent. Scotiabank (TSX:BNS) shed 66 cents to $57.58 while Manulife Financial (TSX:MFC) gave back 32 cents to $15.76.
The tech sector was also lower. Research In Motion (TSX:RIM) dropped 83 cents to $35.82 after it said Friday that it will launch its PlayBook tablet device in another 16 international markets over the next 30 days, including India, the U.K. and Australia.
The TSX fell 434 points or 3.2 per cent this week, on top of a two per cent slide last week, with traders cautious in the wake of a string of economic data that have pointed to a U.S. economy that is slowing faster than previously thought.
Traders started the week in a negative mood following a much worse than expected May employment report out of the U.S. last Friday. Pessimism deepened after the U.S. Federal Reserve's latest cross-country survey of economic conditions, the so-called Beige Book, said Wednesday that the economy slowed in several U.S. regions this spring. High gasoline prices weakened consumer spending and the Japan crises reduced manufacturing output.
A string of losses has left the TSX about 1,200 points or 8.7 per cent below its highs for the year and more than 350 points below where it started 2011.
New York markets were also sharply lower with the Dow Jones industrial average 172.45 points lower at 11,951.91.
The Nasdaq composite index lost 41.14 points to 2,643.73 while the S&P 500 index gave back 18.02 points to 1,270.98.
Traders also took in indications that the Chinese economy, a huge consumer of oil and metals, may not be slowing as quickly as thought.
China's imports rose 28.4 per cent over a year ago in May, up from April's 21.8 per cent growth rate and beating most forecasts, data showed Friday. Export growth eased to 19.4 per cent from April's 29.9 per cent amid slower global demand.
The Chinese government has been moving to cool its economy in order to bring down high inflation, particularly rising food costs, through higher interest rates and higher reserve requirements for banks.
"The continued resilience of imports suggests the economy may not be cooling as quickly as some had believed after softer readings in the purchasing managers index and other indicators, which could place further pressure on the (Chinese central bank) to tighten more to contain well above target inflation," said CIBC World Markets senior economist Peter Buchanan.
In earnings news, retailer Lululemon Athletica Inc. (TSX:LLL) beat analyst expectations in the first quarter with a bigger profit on the back of stronger sales of its yoga apparel. Earnings came in at $33.5 million, or 46 cents per share, above predictions of 38 cents per share, and also ahead of the $19.6 million in profit reported a year ago. Revenue increased to $186.8 million from $138.3 million. Its shares jumped $4.10 to $88 as the company also forecast stronger than expected second-quarter and full-year earnings.
Patheon Inc. (TSX:PTI), a provider of contract drug manufacturing services, reported it lost US$11.2 million in the second quarter, reversing a $10.9-million profit a year earlier. The company, which reports in U.S. currency, said weakness in the U.S. dollar resulted in an $8.8-million currency translation hit on its books. Revenues for the quarter fell 3.1 per cent to $170 million and its shares slipped 27 cents to $1.93.
