Selloff continues

Only metals group gains

May 7, 2010 (Baystreet.ca) --

Canadian stocks were lingering deep in the red in mid-morning deals Friday as fears over the Greece contagion spreading to a few other nations in the region overshadowed positive jobs data from both sides of the border.

The S&P/TSX composite index sank 176.42 points, or 1.5%, by Friday noon to 11,666.01

Also, falling crude prices continued to weigh on energy shares. Meanwhile, traders were speculating a more imminent interest rate hike after Canada created more jobs than expected in April.

Among energy plays, Baytex Energy lost 5.50% and Pacific Rubiales was down 7.23%.

Canadian Natural Resources surrendered 3.70% even after reporting improved first-quarter net earnings of $1.60 per share, compared to $0.56 per share in the same quarter last year. The company said it would subdivide its common shares on a two for one basis.

Among base metals stocks, FNX Mining and Major Drilling shed around 4% each.

In the gold space, Lihir Gold slipped over 4% and Nova Gold lost over 5%.

International gold company Eldorado Gold shed 2.43%. The company reported first-quarter net income of $0.10 per share, up from $0.04 per share in the year ago quarter. Analysts were expecting the company to report earnings of $0.07 per share this quarter. The company also announced an annual dividend of $0.05 per common share.

Gold producer Iamgold Corp. was down 2.65%. The company reported first-quarter net earnings of $0.16 per share, compared to $0.17 per share in the year ago quarter. Analysts were expecting the company to record earnings of $0.13 per share this quarter.

Precious and base metal explorer New Gold moved down 2.70% after reporting first-quarter net income of $17.5 million, compared to net income of $12.1 million in the prior year quarter. On a per share basis, net income was $0.04, down from $0.06 in the same quarter last year. Analysts were expecting the company to post income of $0.04 per share this quarter.

Meanwhile, gold mining company Richmont Mines gained 1.06% after it said its first-quarter net earnings grew to $0.07 per share from $0.05 per share in the prior year period. The company also said it will acquire an additional 30% of the issued and outstanding shares of Louvem Mines Inc.

Among financial stocks, TD Bank moved down 1.58% and Canadian Western Bank gave in 2.62%.

In the IT space, blackberry maker Research In Motion lost 3.72%.

Meanwhile, MacDonald Dettwiler surged nearly 2%. Wednesday, after the markets closed, the company announced that it earned $0.71 per share in the first quarter, up from $0.60 in the year-ago period.

In economic news, Statistics Canada said employment increased by 109,000 in April, recording the largest monthly gain in percentage terms since August 2002.

The unemployment rate edged down one-10th of a percentage point in April to 8.1%. Economists were expecting the economy would add about 20,000 jobs and the unemployment rate would remain unchanged at 8.2%.

The Canadian dollar gained 0.80 cents to 95.82 cents U.S.

ON BAYSTREET

All but one of the 14 TSX subgroups were lower by midday. Health-care stocks suffered 3.3%, followed by energy and gold issues, off 1.8%.

Only a 1.4% gain by global base metals kept things from being unanimous.

The TSX Venture Exchange stumbled 20.42 points to 1,542.26, while the Nasdaq Canada index slid 14.62 points to 721.06.

ON WALLSTREET

In New York, the selloff resumed Friday as investors remained jittery following one of the most gut-churning days in Wall Street history.

The Dow Jones industrial average slid 61.29 points to 10,459.03

The S&P 500 index toppled 7.45 points to 1,120.70. The Nasdaq composite index added 27.87 points to 2,291.77.

Investors eyed a surprisingly strong rise in April payrolls that showed employers added 290,000 jobs in the month. The figure topped estimates and was the biggest one-month gain since March 2006.

But investors were more focused on finding their footing after Thursday's wild swings, in which the Dow lost almost 1,000 points, before recovering some to close down 348 points. Erroneous trading on nearly 300 stocks reportedly caused the selloff, which picked up speed as investor panic increased.

Fears about the spread of the European debt crisis dragged on stocks through the early afternoon. But the selling picked up in intensity and the Dow reached its bottom at around 2:40 p.m. ET.

The selling was a result of trading glitches that caused some stocks, including Dow component Procter & Gamble to plunge 37% to $39.37 U.S. per share from the close of $62.12 U.S. Wednesday.

The consumer products maker recovered most of that loss by the close, ending just 2% lower.

At the closing bell, the Dow was down 348 points, or 3.2%, to end at 10,520. The Dow's biggest one-day point decline on a closing basis was Sept. 29, 2008, when it fell 777.68, which had also been the previous intraday mark. The S&P 500 index slipped 38 points, or 3.2%. The Nasdaq composite dropped 83 points, or 3.4%.

Concerns about Greece's problems spreading through Europe remained in place Friday. Investors also kept an eye on Britain's elections, which ended in a hung Parliament, with none of the ruling parties possessing enough seats for majority rule.

AIG reported net income attributable to the company of $1.5 billion U.S., or $2.16 U.S. per share, during the three-month period ended March 31. A year earlier, AIG lost $4.4 billion U.S., or $39.67 U.S. per share.

AIG's shares are up 23% this year on renewed hopes that it can pay back the billions it owes to taxpayers. The stock was up about 2%.

The U.S. Bureau of Labor Statistics said 290,000 jobs were added in April, though the unemployment rate rose to 9.9%, from 9.7%. Economists surveyed by Briefing.com had expected an increase of 187,000 jobs.

Treasury prices dipped a bit, raising the yield on the 10-year note to 3.43% from Thursday's 3.40%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil fell $1.61 to $75.44 U.S.

Gold prices gained three dollars to $1,200 U.S. an ounce.