Stock markets head for sharply lower open on doubts about employment gains

TORONTO – The Toronto stock market appeared headed for a sharply lower open Friday amid fears that data coming out later in the morning will show a deterioration in U.S. job creation.

Canadian job creation figures are also being released and the dollar was down 0.09 of a cent to 98.69 cents US ahead of that report.

A consensus of economists calls for the creation of about 6,500 jobs after the economy cranked out a stunning 50,700 jobs during February. But opinions about the March numbers have ranged widely, with BMO Capital Markets suggesting as many as 18,000 Canadian jobs were created last month.

U.S. futures were sharply lower after a string of weak economic reports this week suggested that job growth weakened last month.

The Dow Jones industrial futures fell 86 points to 14,445, the Nasdaq futures lost 18.5 points to 2,766.5 while the S&P 500 futures shed nine points to 1,545.5.

Traders had started the week off expecting that the U.S. non-farm payrolls report would show that about 190,000 jobs were produced in March. But that was before the release of data over the past few days showing slower than expected expansion in both the manufacturing and service sectors, capped off with a report from payroll firm ADP that the economy created fewer than expected jobs in the private sector.

It has been a tough week on markets, with the TSX moving into the negative column for the year to date on worries about the pace of the U.S. economy and purchasing managers indexes from China that, while showing expansion, missed expectations.

The resource-based TSX has been particularly pressured by mining stocks. Base metals are down 17.5 per cent so far this year, reflecting weak commodity prices amid a slow global economic recovery. And the gold sector has fallen 22.2 per cent as gold companies have suffered from bullion costs that haven’t kept pace with growing costs of getting the precious metal out of the ground.

The more broadly-based Dow industrials is still up over 11 per cent for the year.

On commodity markets, the June crude contract on the New York Mercantile Exchange lost 43 cents to US$92.83 a barrel.

May copper was off a cent to $3.34 a pound and June bullion rose $3.40 to US$1,555.80 an ounce.

Overseas, Japan’s benchmark stock index surged to its highest level in more than four years Friday, its second straight day of big gains after the central bank announced aggressive action to lift the economy out of a prolonged slump.

The Nikkei 225 in Tokyo closed 1.6 per cent higher after The Bank of Japan unveiled plans Thursday to pump huge amounts of money into the financial system in order to spur price rises, spending and borrowing in an economy that has stagnated for years.

Stock markets in Asia outside of Japan sagged.

Hong Kong’s Hang Seng tumbled 2.7 per cent. Analysts said the fall reflected some nervousness about a recent outbreak of deadly bird flu in China. Six people have died and authorities have ordered the slaughter of all poultry at a Shanghai market where the virus was detected. The news hurt tourism and travel-related shares. Hong Kong-listed Air China plunged 9.8 per cent and China Southern Airlines sank 8.5 per cent.

South Korea’s Kospi dropped 1.6 per cent, dragged down by political jitters over the latest tensions with Pyongyang. Australia’s S&P/ASX 200 lost 0.5 per cent.

European markets were lower as London’s FTSE 100 index fell 1.27 per cent, Frankfurt’s DAX lost 1.66 per cent and the Paris CAC 40 was down 1.49 per cent.