Newspaper article The Canadian Press

TSX Closes Lower as Gold Price Fall off Highs and Hopes of U.S. Rate Cut Take Hit

Newspaper article The Canadian Press

TSX Closes Lower as Gold Price Fall off Highs and Hopes of U.S. Rate Cut Take Hit

Article excerpt

North American stock markets close lower

--

TORONTO - Canada's main stock index ended a holiday week on a down note after gold prices fell from a six-year high and a strong U.S. jobs report undercut hopes of an interest rate cut this month.

The S&P/TSX composite index closed down 46.86 points at 16,541.99, partially rebounding after hitting an intraday low of 16,469.92.

U.S. markets resuming from the July 4 holiday fell from record highs as 224,000 jobs were added in June, beating expectations and suggesting that the economy is stronger than some have speculated.

In New York, the Dow Jones industrial average was down 43.88 at 26,922.12. The S&P 500 index was down 5.41 points at 2,990.41, while the Nasdaq composite was down 8.44 points at 8,161.79.

The stronger employment picture could convince the Federal Reserve that extra stimulus is not required from lower interest rates.

"Given the topsy-turvy bizarro world we live in today, good news is bad news I guess because then the rate cut isn't priced in nearly as strongly," said Les Stelmach, portfolio manager at Franklin Bissett Investment Management.

Before the global financial crisis, the economy and interest rates moved in tandem so a good day for the economy was also good for the stock market, he said.

Now, the stock market rises on bad news and falls on good signals because of the impact on central banks. North American markets increased in June on investor belief that a weakening global economy would get central banks to cut rates.

Stelmach said the jobs report probably just delayed rate cuts.

"Had you had a really poor jobs report, the next meeting of the Federal Reserve might have had, if not an outright cut, then much more accommodative language and this has maybe set them back a month."

Eight of the 11 major sectors of the TSX were lower on Friday, led by a 1. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.