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TSX May Struggle To Move Higher Amid Weak Energy - Canadian Commentary

5/4/2012 9:00 AM ET

Canadian stocks may struggle to move higher at open Friday amid weak energy prices and mixed cues from the global equity markets. Meanwhile, jobs data from south of the border came in mixed, with the economy creating weaker than expected jobs in April even as the unemployment rate fell slightly.

U.S. stock futures were pointing to a flat open amid jobs data.

On Thursday, the S&P/TSX Composite Index extended losses for a second session, dipping 215.23 points or 1.76 percent to 12,014.90.

The price of crude oil was extending losses after the OPEC stated that the members are working to bring down oil prices which are too high at current levels. Crude for June lost $1.85 to $100.69 a barrel

The price of gold was little changed Friday morning as the U.S. dollar was generally steady. Gold for June delivery edged up $2.40 to $1,637.20.

In corporate news from Canada, energy company Canadian Natural Resources (CNQ.TO) reported that its first-quarter net earnings were C$427 million or C$0.39 per share up from C$46 million or C$0.04 per share for the first quarter of 2011. Adjusted net earnings from operations were C$300 million or C$0.27 per share compared to C$228 million or C$0.21 per share. Analysts were expecting the company to report earnings of C$0.44 per share for this quarter.

Petroleum and natural gas company Penn West Petroleum (PWT.TO) said its net income for the first quarter fell to C$59 million or C$0.12 per share from C$291 million or C$0.63 per share in the same quarter a year ago.

Airlines operator Air Canada (AC_A.TO, AC_B.TO) reported that its system traffic for the month of April 2012 increased 1.0 percent on a system-wide capacity decrease of 0.3 percent. Separately, the company posted a significantly wider first-quarter net loss of C$210 million or C$0.76 per share, versus year-ago quarter's C$19 million or C$0.07 per share loss.

Diversified services company K-Bro Linen Inc. (KBL.TO) reported improved first quarter net income of $2.5 million or $0.35 per share compared to $1.6 million or $0.22 per share last year.

In economic news, job creation in the U.S. economy was weaker than expected in April although the unemployment rate fell slightly, according to the Labor Department. The overall economy added 115,000 jobs in April, down from revised data that showed March job creation at 154,000, notably higher than the 120,000 initially reported. The job creation numbers for April were also notably lower than the predictions of most economists who had forecast 165,000 new jobs for the month.

Elsewhere, euro zone private sector activity declined in April at the fastest rate since October 2011, final data released by Markit showed. The composite output index dropped to 46.7 in April from 49.1 in March. The headline index also came in well below its earlier flash estimate of 47.4

Meanwhile, data from the Eurostat revealed that retail sales volume in the euro zone climbed 0.3 percent month-on-month in March, offsetting February's 0.2 percent drop. Economists were expecting sales to remain flat in March. Sales were down 0.2 percent on a yearly basis. The rate of decline slowed from the 2.1 percent drop seen in February. Also, March's drop was smaller than the 1.1 percent fall forecast by economists.

by RTT Staff Writer

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