TSX falls, spooked by job numbers

North American markets closed mostly lower Wednesday on evidence an uncertain economic outlook in both the U.S. and Europe are making employers unwilling to add to their payrolls.

The Toronto stock market fell as commodity prices backed off, with the S&P/TSX composite index down 102.67 at 12,230.12. Earlier it was off by as much as one per cent.

The Canadian dollar was down 0.07 of a cent to 101.37 cents US.

In New York, the Dow Jones industrial average declined 10.75 points to 13,268.57 The Nasdaq composite index was up 9.41 points to 3,059.85. and the S&P 500 index slipped 3.51 points to 1,402.31.

Worse-than-expected numbers from private U.S. payroll firm ADP suggested private employers created 119,000 jobs in April, when the markets had expected 170,000.

As well, eurozone unemployment reached its highest level in March since the euro was launched in 1999, rising by 169,000 and taking the rate up to 10.9 per cent.

U.S. factory orders weak

The U.S. job report for April will be released Friday. Canada’s numbers come out a week later, on May 11. 

Adding to the selling pressure in markets was a report showing weak U.S. factory orders in March. Orders declined by the most in three years.

And another report showed that manufacturing activity across the eurozone shrank at a faster pace than previously estimated in April.

The final April Markit purchasing managers index fell to 45.9 from a reading of 47.7 in March and was below an earlier estimate of 46. A reading of less than 50 indicates a contraction.

The data showed accelerating downturns for Italy, Spain and Greece.

But even eurozone powerhouse Germany saw shrinking activity as its manufacturing PMI fell to a 33-month low at 46.2.

"Now it is only the first month of the quarter but this is clearly a bad start and if maintained, suggests a deepening second quarterly decline in economic activity (aka: recession)," said BMO Capital Markets senior economist Jennifer Lee.

Commodities fall

"And that is bad news for the region that just reported a 10.9 per cent unemployment rate in March, a level not seen in 15 years."

The May copper contract was down six cents to $3.79 US a pound, crude for June delivery fell 94 cents to $105.22 US a barrel and June gold lost $8.40 to trade to end at $1,654.00 US an ounce.

Also depressing commodity prices was a survey of purchasing managers by HSBC which shows China's manufacturing contracted in April for the sixth straight month. HSBC said Wednesday that its purchasing managers index for April was 49.3, up from 48.3 in April.

The index has remained below 50 since October.

The HSBC survey tends to reflect private and export-sector activity more strongly than an official index released Tuesday that showed manufacturing gaining last month.

European markets were mixed with London's FTSE 100 index closing down 0.93 per cent, Frankfurt's DAX off 0.75 per cent while the Paris CAC 40 gained 0.42 per cent.

Earlier in Asia, Japan's Nikkei 225 rose 0.3 per cent while Hong Kong's Hang Seng gained one per cent.

Mainland Chinese shares advanced after authorities said that China's two stock exchanges would cut fees charged for trading yuan-denominated shares by 25 per cent from June 1.

The benchmark Shanghai Composite Index rose 1.8 per cent and the Shenzhen Composite Index gained 1.7 per cent.