Stocks fall on weak data from China, U.S.

North American stock markets fall as lower oil prices and weak manufacturing data from China and the U.S. set a gloomy mood for investors on the first trading day of February.

'There are precious few indicators that point to a recovery within China'

CBC News Posted: Feb 01, 2016 10:49 AM EST | Last Updated: February 1, 2016

Traders Glenn Kessler, Gordon Charlop, and John Yaccarine, left to right, work on the floor of the New York Stock Exchange, on Feb. 1, 2016. A steep drop in oil helped to pull stock markets lower in early trading in New York and Toronto. (Richard Drew/Associated Press)

North American stock markets fellMonday as lower oil prices and weak manufacturing data from China and the U.S. set a gloomy mood for investors on the first trading day of February.

The benchmark index of the Toronto Stock Exchange closeddown 148points, or 1.2per cent, to 12,674.

The energy sector ledall decliners, off 3.1per cent. An $11.50jump in the price of gold, to $1,128US an ounce, boosted gold stocks.

Crude oil futures fell $2to settle at $31.62US a barrel, reversing last week's solid gain. Natural gas futures tumbled15cents to $2.15US per million BTUs, as much of the U.S. northeast basked in unseasonably warm weather.

Oil prices droppedafter a Chinese factory purchasing manager survey fell to 49.4 in January, the lowest level in more than three years. Readingsbelow 50 indicate contraction and suggest furtherweakness in the world's second-largest economy.Global stock markets weremixed.

The Dow Jones industrial average ended the trading daydown 17points, or0.1per cent, at16,449.

"There are precious few indicators that point to a recovery within China and this continues to spell bad news for the global economy which has been hugely reliant upon Chinese demand to help compensate for weak western demand post-2007," said Joshua Mahony, market analyst at IG.

U.S. stocks were also pressured by news from Institute for Supply Management thatU.S. factory activity shrank more than expectedin January. It was the fourth straightmonth of decline, as astrong U.S. dollar and weak demand overseas hurt U.S. manufacturers.

The Canadiandollar gained almost 4/10ths of a centto close at 71.79cents US. The looniehasgained about threecentsagainst its U.S. counterpart in the last couple of weeks. Some foreign exchange analysts think the downward movementon the Canadian dollarhas been arrested, at leastfor the time being.

"Since the start of January, the tone of key data reports has shifted in the [Canadian dollar's]favour, mainly because key Canadian data releases have tended to surprise on the upside," noted Scotiabankchief foreign exchange strategistShaun Osborne in a Monday report.

"Canadian international trade, wholesale trade, manufacturing sales, employment reports, for example, have all reported better-than-consensus outcomes."

With files from The Associated Press

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