TSX to move lower amid U.S. government shutdown worries, huge BlackBerry loss

TORONTO – The Toronto stock market was in for a negative session Friday as BlackBerry (TSX:BB) (NASDAQ:BBRY) turned in a huge loss and traders avoided risk going into the weekend amid the possibility of a U.S. government shutdown.

BlackBerry lost US$965 million in the second quarter as revenue plunged 49 per cent from the previous quarter and 45 per cent from a year earlier to US$1.6 billion, amid dismal sales of its new smartphones.<

However, the results were in line with a warning issued last week by BlackBerry (TSX:BB), when it announced 4,500 jobs will be cut from its global workforce and its shares were up 1.5 per cent to US$8.07 in pre-market trading in New York.

There was skepticism going into the weekend that Congress can pass a funding bill to keep the federal government operating after Oct. 1, when its new fiscal year starts. Also, the U.S. borrowing limit needs to be raised before Oct. 17.

Conservative Republicans are insisting that the shutdown bill and a separate debt limit measure present an opportunity to demolish the Affordable Care Act, otherwise known as Obamacare, and slash spending.

The Canadian dollar drifted 0.1 of a cent lower to 96.86 cents US.

U.S. futures were also deep in the red with the Dow Jones industrials down 55 points to 15,206, the Nasdaq futures were 12.2 points lower to 3,213.8 and the S&P 500 futures were off eight points to 1,684.5.

Commodity prices were mixed with the November crude contract on the New York Mercantile Exchange down 42 cents to US$102.61 a barrel.

Metal prices advanced with December copper on the Nymex ahead two cents to US$3.32 a pound.

December bullion was up $17.10 to US$1,341.2.

In other corporate news, J.C. Penney, the struggling retailer that is trying to reassure the market about its financial stability, expects to raise about $810.6 million via a public stock offering. J.C. Penney plans to offer 84 million shares priced at $9.65 per share. That is a 7.3 per cent discount to Thursday’s closing price of $10.42 per share. Its stock dropped more than seven per cent in premarket trading Friday.

European bourses were also week going into the weekend with London’s FTSE 100 down 0.88 per cent, Frankfurt’s DAX lost 0.35 per cent while the Paris CAC 40 edged 0.23 per cent lower.

Earlier in Asia, Hong Kong’s Hang Seng Index rose 0.3 per cent while in mainland China, the Shanghai Composite Index advanced 0.2 per cent.

Markets in China were subdued ahead of the launch Sunday of a pilot free trade zone in Shanghai.

A weeklong holiday that starts Tuesday and follows another three-day holiday just last week was also expected to keep some investors on the sidelines.

Japan’s Nikkei 225 dipped 0.3 per cent after the country’s consumer price inflation rose at the fastest rate in five years in August. South Korea’s Kospi climbed 0.2 per cent.