Snapping their four-session winning streak, Canadian stocks were lingering deep in the red Thursday morning amid concerns that the Federal Reserve might scale down its stimulus program if labor market improves. Meanwhile, energy prices were under pressure after China's manufacturing activity deteriorated for the first time in nearly eight months.
Minutes of the Federal Reserve's April 30-May 1 meeting revealed "a number" of members favor tapering the central bank's $85-billion bond-buying program as early as the June meeting if the labor market continues to improve.
The S&P/TSX Composite Index dived 102.15 points or 0.80 percent to 12,650.36, after adding nearly 300 points or just over 2 percent in the past four straight sessions.
The Diversified Materials Index was the major loser, shedding over 3 percent. Teck Resources (TCK_B.TO) lost about 5 percent, while First Quantum Minerals (FM.TO) was surrendering 3 percent.
The price of crude oil moved down Thursday morning as weak manufacturing data out of China renewed worries over demand growth. The flash HSBC Purchasing Managers' Index in China for May slipped under the 50-point level, indicating contraction for the first time in eight months. Crude for July delivery lost $1.62 to $92.66 a barrel.
In the oil patch, Tourmaline Oil (TOU.TO) and Suncor Energy (SU.TO) lost around 2 percent each.
On the other hand, NuVista Energy Ltd. (NVA.TO) gained over 4 percent.
Lender TD Bank Group (TD, TD.TO) lost about 1 percent despite reporting second-quarter net income of C$1.72 billion, higher than C$1.69 billion in the prior year. Meanwhile, earnings per share remained flat at C$1.78. Adjusted earnings for the recent quarter totaled C$1.90, while the company posted C$1.82 per share a year ago.
Meanwhile, gold stocks were moving higher amid a rebound in bullion prices. The price of gold rebounded near $,1400 Thursday morning, with the US dollar paring recent gains versus a basket of currencies after Federal Reserve Chairman Ben Bernanke's remarks were seen as supportive of leaving the monetary policy unchanged. Gold for June delivery gained $16.50 to $1,383.90 an ounce.
Among gold stocks, Kirkland Lake Gold (KGI.TO)\jumped nearly 8 percent. Royal Gold (RGL.TO), Goldcorp. (G.TO), Barrick Gold (ABX.TO) and Eldorado Gold (ELD.TO) were up around 2 percent each.
In economic news from the U.S., the Labor Department said that initial jobless claims fell to 340,000 in the weekended May 18, a decrease of 23,000 from the previous week's revised figure of 363,000. Economists had expected jobless claims to drop to about 345,000 from the 360,000 originally reported for the previous week.
Separately, the Commerce Department said that new home sales climbed 2.3 percent to a seasonally adjusted annual rate of 454,000 in April from the revised March rate of 444,000. Economists had expected new home sales to rise to an annual rate of 425,000 compared to the 417,000 originally reported for the previous month, reflecting a 1.9 percent increase.
Elsewhere, Germany's private sector activity improved from a five-month low, but remained marginally below the neutral level, flash survey results from Markit Economics showed. The composite output index rose to 49.9 in May from a five-month low of 49.2 in April. A reading below 50 suggests contraction.
Meanwhile, euro zone's private sector activity continued to decline in May, but at a slower pace than in the previous month, flash results of a survey by Markit Economics showed. The composite output index, that measures performance of the both manufacturing and service sectors, rose to 47.7 in May from 46.9 in April. Economists expected the reading to rise to 47.2.
The U.K. economy avoided recession in the first quarter as initially estimated, second estimates from the Office for National Statistics showed. Gross domestic product grew 0.3 percent sequentially in the first quarter, offsetting the last quarter's 0.3 percent fall.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.