North American stocks head down

North American stocks head down

Tuesday, February 05, 2008

North American stock market indexes opened substantially lower on Tuesday morning, following steep losses in Europe, lower commodity prices and a surprise release from the Institute of Supply Management which suggested that the U.S. services industry had contracted in January.

“The low for the business activity index in the recession of 2001 was 47.9, so it is very tempting to see this survey as evidence that recession is unavoidable,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a note to clients. “But we have never found any predictive power in the survey, which lags growth in core retail sales. We already know holiday sales were horrible, and have worsened since.... Still, ISM optics are horrible – orders down 10.4 points, employment 7.9 points – and will keep pressure on the Fed.”

Investors, however, see little upside to the survey. The S&P/TSX composite index fell 94 points in early trading, or 0.7 per cent, to 13,179. The Dow Jones industrial average tumbled 131 points, or 1 per cent, to 12,504. All 30 stocks in the blue-chip index were down, led by Intel Corp., Citigroup Inc. and Alcoa Inc.

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Oil up, gold down, TSX flat Slow But Sure- Up Up Up

Oil up, gold down, TSX flat

RTGAM




With commodity prices heading in different directions on Monday, it is little wonder that the commodity-heavy S&P/TSX composite index was also pushed and pulled, leaving it not far from where it began. It closed at 13,261.04, down 57.33 points or 0.4 per cent.


On the upside, crude oil traded at $89.98 (U.S.) a barrel in New York, up $1.02. That gave a boost to a number of energy producers including Canadian Natural Resources Ltd. and Suncor Energy Inc. They rose 2.8 per cent and 1.1 per cent, respectively. On the downside, though, gold tumbled $2.29 an ounce to $903.18, making Barrick Gold Corp. act like a concrete block on the index's ankle. Barrick shares tumbled to $49.07, down $1.57 or 3.1%.


In the United States, where commodities are consumed more than they are produced, the Dow Jones industrial average closed at 12,635.16, down 108.03 points or 0.85 per cent. The S&P 500 fell to 1380.82, down 14.6 points or 1.05 per cent, weighed down by financials that had been downgraded by analysts amid ongoing credit concerns. Merck & Co. Inc., the pharmaceutical company, was one of the brightest spots in the day. Its shares rose 3.2%.






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