TSX falls hard

Only metals group gains

May 7, 2010 (Baystreet.ca) --

Stocks markets continued to sell off Friday as fears of a widening sovereign debt crisis in Europe overshadowed strong April job growth in North America that came in far above expectations.

The S&P/TSX composite index sank 150 points, or 1.3%, to finish the week at 11,692.43, lower on the week by 4.2%, and below where it closed on New Year's Eve.

TSX commodity stocks suffered as investors continued to buy into the safe haven of the U.S. dollar to protect against potential fallout if the European debt crisis can't be contained within Greece and countries such as Portugal and Spain will also need massive aid.

But investors also sold bank stocks as tighter credit conditions mounted while demand concerns punished transportation stocks.

Suncor Energy lost 49 cents to $31.88.

Canadian Natural Resources fell 69 cents to $72.03. The oil and gas producer's president, Steve Laut, said Friday that the company will complete as much engineering work as possible before giving its Kirby oilsands project the green light later this year.

Turning a sharper focus to early engineering is a way it hopes to avoid the kind of cost overruns on Kirby that plagued the Calgary company's massive Horizon open-pit mine, which came in billions of dollars over budget.

The TSX global gold index fell, as Barrick Gold Corp. was down $1.26 to $44.70.

Iamgold Corp. said quarterly net earnings were $58.8 million U.S., up 12% from the $52.2 million U.S. it earned the same 2009 quarter. Revenue was $240.1 million U.S., up from $188.6 million U.S. in Q1 2009 and its shares declined 38 cents to $18.47.

The base metals sector was slightly lower with July copper up three cents at $3.14 U.S. a pound. Teck Resources declined 34 cents to $36.34S while FNX Mining gave back 45 cents to $11.15.

The industrials sector backed off substantially with Canadian National Railways down 94 cents to $58.16 and Canadian Pacific slipped 88 cents to $56.45.

The financial sector gave back ground, as TD Bank lost 39 cents to $71.92 while Royal Bank was down 65 cents to $58.92.

In other corporate news, GMP Capital Inc. said it had a $62.4-million net loss in the first quarter as it wrote down the value of its EdgeStone business unit. Without the $80.5 million in charges related to EdgeStone, GMP's adjusted net income was $13.6 million. Its shares were off 41 cents to $11.42.

Enerplus Resources Fund, a Calgary based oil and gas producer, reports its net profits for the first quarter surged to more than $80 million from $51.8 million even as the company generated lower production. Its units added 39 cents to $23.27.

Canadian Real Estate Investment Trust is boosting its monthly distributions to unitholders to 11.75 cents per quarter, up from 11.50 cents. The REIT also announced Friday that net income fell to $23.3 million or 35 cents per unit for the three months ended March 31, down from $29 million, or 47 cents per unit, a year ago. Its units were up 19 cents to $27.41.

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 0.83 cents to 95.85 cents U.S.

ON BAYSTREET

All but one of the 14 TSX subgroups were lower. Health-care stocks were the worst off, down 3.1%, while gold sank 2.2% and materials capsized 2%.

Global base metals were the lone stalwart gainer, ahead 0.6%.

The TSX Venture Exchange stumbled 13.33 points to 1,549.35, while the Nasdaq Canada index slid 19.08 points to 716.60. The Venture index lost 7.5% on the week.

ON WALLSTREET

In New York, stocks slumped Friday in a choppy session as investors mulled the Greek debt crisis and the April jobs report in the aftermath of one of the most gut-churning days in Wall Street history.

The Dow Jones industrial average tumbled 139.89 points, or 1.3%, to 10,380.43

The S&P 500 index toppled 17.27 points to 1,110.88. The Nasdaq composite index fell 54 points to 2,265.64.

All three are now in negative territory for the year.

Tech shares slumped across the board, including IBM, Hewlett-Packard, Cisco Systems and Microsoft. But losses were pretty spread out, with 21 of 30 Dow components sliding. Gains in JPMorgan Chase and Chevron helped protect the Dow from bigger losses.

Stocks were extremely volatile throughout the session, with the major indexes criss-crossing the breakeven line several times during the day. Investors looked past a big rise in April payrolls and instead focused on Europe in the aftermath of Thursday's roller coaster ride.

Europe's debt woes were in focus as riots continued in Greece. British elections failed to produce a ruling majority, resulting in a hung Parliament for the first time since the 1970s.

Meanwhile, U.S. investors remained rattled after a session in which the Dow lost almost 1,000 points before recovering some.

An already weak Dow plunged 650 points in less than 10 minutes Thursday afternoon, as erroneous trades on hundreds of stocks piled up, causing an investor panic. The blue-chip indicator had already been sporting a nearly 350-point loss on Greek debt worries ahead of the crash, bringing its losses to almost 1,000 points shortly before 3 p.m. ET.

That 998.5-point loss was the worst ever on an intraday basis. However, the Dow ended up recovering most of the sudden loss by the close, ending the day down 348 points. That loss was the Dow's worst in 15 months.

On Friday, Nasdaq said it canceled trades on 296 stocks that saw their prices fluctuate by at least 60% between 2 p.m. and 3 p.m. ET on Thursday, including Accenture, which plunged from $40.13 U.S. to just one cent before recovering.

But trades were not canceled for Dow components Procter & Gamble and 3M, which lost 37% and 22% respectively, contributing 315 of the 998.50 points the Dow lost at its nadir.

Troubled insurer AIG reported a quarterly profit Friday morning, versus a year-ago loss, as the company's insurance business continued to stabilize. The company's shares are up 23% this year on hopes it can pay back the more than $120 billion U.S. in loans it owes taxpayers.

The company received a bailout worth up to $182 billion U.S. from the government.

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 $1.82 to $75.29 U.S.

Gold prices gained $11 to $1,209 U.S. an ounce.