News Column

Toronto stock market set to open; Canada's jobless rate up to 7.1 per cent

July 11, 2014

The Canadian Press



TORONTO - The Toronto stock market looked set to open higher on Friday, while Canada's unemployment rate rose one-tenth of a point to 7.1 per cent in June, up from 7.0 per cent the previous month.

Statistics Canada said there were 9,400 jobs lost in June.

The Canadian dollar was up 0.09 of a cent to 94.01 cents US.

U.S. futures were positive with the Dow Jones industrial futures up 27 points to 16,915.07, the Nasdaq gained 11.7 points to 3,880.04, while the S&P futures rose 3.75 points to 1,964.68.

On Thursday, the U.S. Labor Department reported that weekly applications for unemployment aid dropped 11,000 to a seasonally adjusted 304,000 and near a seven-year low. The four-week average, a less volatile measure, dipped 3,500 to 311,500, the second-lowest level since August 2007. Applications are a proxy for layoffs, so the low readings indicate that employers were letting go of fewer workers.

Meanwhile, European stock markets rebounded Friday after slumping on worries about the soundness of a bank in Portugal, while trading in Asia was muted over the spectre of more financial turmoil in Europe.

Markets worldwide had fallen Thursday because of jitters about the financial stability of Portugal'sEspirito Santo International, which reportedly missed a debt payment this week and was cited for accounting irregularities, echoing issues that sparked Europe's debt crisis four years ago. Senior Portuguese officials have given assurances about the soundness of Portugal's biggest bank.

In corporate news, cigarette makers Reynolds American Inc. and Lorillard Inc. on Friday said they are in talks of a possible merger that would combine two of the nation's biggest tobacco companies. The announcement follows media reports over the past few months about the possible combination that would create a formidable No. 2 to rival Altria Group Inc., owner of Philip Morris USA.

Wells Fargo says its second-quarter profit rose three per cent, bolstered by loan growth, higher deposit balances and improved credit quality. Revenue slipped, but still topped analysts' estimates. The nation's largest mortgage lender said Friday that net income after taking out dividends on preferred stock was $5.42 billion, or $1.01 per share, for the period ended June 30. A year ago it earned $5.27 billion, or 98 cents per share.

Whirlpool will pay more than $1 billion for a controlling stake in Indesit, the appliance maker's counterpart in Italy. The deal announced Friday will put the U.S. company in possession of shares representing 66.8 per cent of Indesit's voting stock. Whirlpool, which also owns the Maytag brand, will pay $15.06 per Indesit share.

The price of oil began to fall again on Friday, giving up most of the gains it had made the previous day in the first rally in two weeks.

Oil prices shot up in the last month to a 10-month high of more than US$107 a barrel over concerns that strife in Iraq might disrupt supplies. However, they have since been easing back down as al-Qaida inspired militants' gains in Iraq did not affect oil exporters. Also putting downward pressure on prices is the prospect of a sudden return of Libyan oil to the global market.

On the commodity markets, the August crude contract on the New York Mercantile Exchange down 41 cents to US$102.52 a barrel.

August bullion was down $1.30 to US$1,337.9 an ounce, while August copper was down a penny to US$3.25 a pound.


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Source: Canadian Press DataFile


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