The Toronto Stock Exchange appeared set for a loss at the open Thursday as commodity prices sank on reports of slower growth in the eurozone and China as fears persist that demand for resources will shrink as a result.
The Canadian dollar shed 0.43 of a cent to 100.35 cents US as investors retreated to the perceived safety of the greenback.
Investors will be looking to data on retail trade from January for signs of how healthy consumer spending has been this year.
While Canadian earnings season has largely come to a close, a positive report came from one of the country’s fastest growing companies Thursday.
Lululemon Athletica Inc. (TSX:LLL) posted net income of US$73.5 million or 51 cents per share for the three months ended Jan. 29. That was two cents higher than analysts had expected, according to a poll by Thomson Reuters.
A year earlier, the retailer had reported earnings of $54.8 million or 38 cents per share.
Revenues grew 51% to $371.5 million from $245.4 million. Same-store sales, or sales at stores open at least a year, increased 26%.
Wall Street futures were mixed, with Dow Jones industrial futures falling 65 points to 13,001, Nasdaq futures down 13 points to 2,722 and S&P 500 futures down 8.5 points to 1,389.
Economic data out of the U.S. later Thursday includes the index of leading indicators and a speech by Federal Reserve Chairman Ben Bernanke.
Gold prices lost $15.80 to US$1,634.50 per ounce. Copper prices fell eight cents to US$3.76.
The price of oil for the May contract was down $1.22 to US$106.05 a barrel, in electronic trading on the New York Mercantile Exchange.
Disappointing figures out of China and the 17-country eurozone have prompted investors to cash out of stocks, following a strong run in previous weeks. Many traders are wary of further pushing up indexes, many of which recently hit multi-month highs.
The catalyst to Thursday’s retreat was a Chinese manufacturing index compiled by HSBC. Its main index fell to 48.1 in March from 49.6 in February. Figures below 50 indicate that manufacturing is contracting.
Earlier this week, soft Chinese housing data and a warning from miner BHP Billiton have stoked concerns about the outlook in the world’s second-largest economy, which has shored up the global economy over the past few years.
A similarly weak eurozone survey from financial information company Markit only added to concerns. Its composite purchasing managers’ index, which combines both the services and manufacturing sectors, fell to a below-forecast 48.8 points in March from 49.3 the month before.
In Europe, the FTSE 100 index of leading British shares was down 0.9% while Germany’s DAX fell 1.5%. The CAC-40 in France was 1.6%.
The retreat in Asia earlier was less marked than that in Europe. The Nikkei 225 index in Tokyo ended 0.4% higher at 10,127.08 after Japan announced it had posted its first trade surplus in five months in February, on a recovery in auto and electronics exports to the United States.
Hong Kong’s Hang Seng closed up 0.2% at 20,901.56 while mainland China’s benchmark Shanghai Composite Index slipped 0.1% to 2,375.77.