The Toronto stock market headed for a third day of losses Thursday as a disappointing Spanish government bond auction put the European debt crisis back on centre stage.
Buying sentiment has also chilled this week because of greatly reduced expectations that the U.S. Federal Reserve will embark on more stimulus to help the American economic recovery.
The Canadian dollar was down 0.22 of a cent to 100.14 cents US ahead of the release of the March employment report from Statistics Canada. Economists expect the economy cranked out about 10,000 jobs during the month.
U.S. futures were also lower as traders reduced their exposure ahead of the release of the U.S. non-farm payrolls report for March, which is released Good Friday morning when markets will be closed.
Economists expect job creation to come in around 210,000, which would be the fourth month in a row that the economy has turned out more than 200,000 jobs.
The Dow Jones industrial futures fell 50 points to 12,955, the Nasdaq futures were down seven points to 2,729.5 and the S&P 500 futures were off six points to 1,387.2.
The TSX and the Dow registered steep triple digit losses on Wednesday after Spain’s bond yields advanced in the wake of a disappointing set of bond auctions.
Spain has become the latest point of concern in Europe’s debt crisis as investors are concerned over the ability of the government to push through its big austerity program at a time when its economy is heading for a return to recession and unemployment is standing at around 23%. The yield on the country’s 10-year bond pushed up a further 0.07 percentage point to 5.73% Thursday.
Also on Thursday, France saw its borrowing costs rise slightly as it sold €8.44 billion in a long-term bond auction.
The largest issue was of 10-year bonds, for which the yield rose from 2.91% to 2.98% when it was sold last month.
Europe has weighed on markets for most of this week after purchasing managers data indicated the eurozone is facing recession.
Commodity prices recovered some of the losses incurred over the last two sessions with the May crude contract up 34 cents to US$101.81 after demand concerns drove prices down almost $4 this week.
Copper was up a penny after sliding 13 cents on Wednesday while Gold gained $12.40 to US$1,626.50 an ounce.
European bourses were in the red with London’s FTSE 100 index lost 0.5%, Frankfurt’s DAX moved down 1.09%and the Paris CAC 40 dropped 0.35%.
Earlier in Asia, Japan’s Nikkei 225 index slipped 0.5% while Hong Kong’s Hang Seng fell 1%.
In mainland China, the mood was somewhat different, with the Shanghai Composite Index up 1.7% and the smaller Shenzhen Composite Index closing 3.1% higher.
On the corporate front, Harry Winston Diamond Corp. (TSX:HW) reports consolidated fourth-quarter net profit attributable to shareholders of US$16.6 million or 19 cents per diluted share, compared with US$13.7 million or 16 cents in the prior-year period. Consolidated sales for the three months ended Jan. 31 were US$216 million, up from US$215.4 million.
Fibrek Inc. (TSX:FBK) is asking the Supreme Court of Canada to rule on the defence it has used to fend off a hostile takeover. At issue is the Quebec company’s decision to issue special warrants to its ally, Mercer International Inc. (TSX:MRI.U), to thwart a takeover by Resolute Forest Products (TSX:ABH).