TSX to weaken as US weekly jobless numbers improve, but retail sector troubled

TORONTO – The Toronto stock market is likely to start lower as a mixed picture emerged on the U.S. economy, while expectations rise that the U.S. Federal Reserve will begin it’s tapering plan next month.

The Canadian dollar was down 0.24 of a cent to 96.58 cents US.

On Wall Street, Dow Jones industrial futures are down 58 points to 15,246. S&P futures have lost 6.6 points to 1,675.40. Nasdaq futures down 16.25 points to 3,107.

The decline comes as some good news emerged about the U.S. economy, as weekly applications for unemployment benefits dropped to a six-year low of 320,000.

Improved sentiment has also pushed U.S. Treasury yields higher as traders anticipate that the Fed will reduce its monetary stimulus in September, which means the cost of borrowing will increase.

But not all of the news was positive on U.S markets as Wal-Mart (NYSE:WMT) added to the sentiment that the retail industry faces a tough last half of the year. The big-box retailer to cut its outlook for the year and reported disappointing quarterly numbers, just as Macy’s did on Wednesday.

Yellow Media Ltd. (TSX:Y) says the chairman of its board of directors will take on the CEO’s role temporarily as the publishing company continues to search for a permanent replacement for Marc Tellier, who vacates the position today.

In commodities, the September crude contract moved ahead 36 cents to US$107.21 a barrel.

December gold bullion dropped $9.40 to close at US$1,324.00 an ounce. September copper decreased 3.7 cents to US$3.30 a pound.

In Europe, many countries were on holiday, though markets remained open. Germany’s DAX was down 0.4 per cent at 8,401 while the CAC-40 in France fell 0.3 per cent to 4,104.

Earlier in Asia, Japan’s Nikkei 225 index tumbled 2.1 per cent to close at 13,752.94. Hong Kong’s Hang Seng was flat at 22,539.25. Australia’s S&P/ASX 200 fell 0.1 per cent to 5,152.40.