TSX rally fizzles on weak global data

Wed May 2, 2012 5:03pm EDT
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By Jon Cook

TORONTO (Reuters) - Toronto's main stock index saw its five-day rally halted on Wednesday as mining and energy shares retreated after weak U.S. private-sector jobs data and shrinking manufacturing activity in Europe and China hurt demand for riskier commodities.

The reports countered Tuesday's strong manufacturing data in China, the U.S. and Canada that had sent global markets soaring.

On Wednesday, those gains were all but erased after a report by payrolls processor ADP showed U.S. private employers added 119,000 jobs last month, well short of expectations.

"The ADP job numbers were pretty darn weak," said John Stephenson, senior vice president at First Asset Investment Management Inc. "So people are saying manufacturing was up but unfortunately nobody hired anyone."

Analysts look to the ADP number as a precursor of what to expect from the U.S. Labor Department's April jobs report on Friday.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished down 102.67 points, or 0.8 percent, to 12,230.12. It was its biggest one-day drop in more than a week.

Six of 10 main sectors in the index were lower. Losses were led by the heavyweight energy group, down 1.8 percent, and materials, which fell 1.6 percent as oil, gold and metals prices sank. <O/R> <GOL/> <MET/L>

Barrick Gold (ABX.TO: Quote) was among the most influential decliners, down 2.7 percent to C$38.80, after the world's largest gold miner reported a first-quarter profit on Wednesday, but investors remained concerned about underlying production costs.   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch