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At the open: Dow hits record but jobs report euphoria soon fades

The Dow Jones industrial average sprinted to a record intraday high at the open to above the 14,400 mark, but the rally soon fizzled out as celebration over a strong February jobs report was replaced by worries that stocks may have been bid up too quickly this week.

The inevitable concern that the improvement in the U.S. labour market may cause the U.S. Fed to ease back on its stimulus measures was also taming enthusiasm for stocks. U.S. financials were particularly under pressure.

The TSX was lower in early trading, hurt by sinking gold prices that have been pressured by the flight of money to higher-risk assets such as stocks. The lacklustre TSX performance came despite Canadian job creation showing remarkable strength last month, helping the loonie to recover some of this week's losses against the greenback.

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At 1017 a.m. (ET), the Dow was up 15 points, or 0.1 per cent, at 14,344 after earlier hitting an intraday record high of 14,413.

The broader S&P 500 index was nearly unchanged after hitting a high of 1,552 near the open, closing in on its record closing high of 1,565.15 from October of 2007.

The S&P/TSX composite index was down 7 points, or 0.05 per cent, at 12,819. Gold was down $11.30 at $1,563.80 (U.S.) per ounce. Other commodities weren't doing great either: crude oil was down 21 cents at $91.35 and copper was down 0.2 per cent at $3.51 per pound.

The U.S. non-farm payrolls report showed the net creation of 236,000 jobs last month. Economists were looking for 165,000 jobs. Meanwhile, the unemployment rate fell to 7.7 per cent, its lowest level since 2008 and also a better reading than what was expected.

In Canada, February's job figures were much stronger than anticipated, with net employment gains of 50.700 more than five times what economists had called for. The unemployment rate, as expected, held at 7 per cent. The loonie is trading up about one-third against the greenback.

Among stocks moving on news this morning was Pandora Media Inc., with its shares are up 24 per cent after it reported better-than-expected fourth-quarter results late Thursday and announced its CEO plans to step down.

On the TSX, SNC-Lavalin Group hiked its dividend by 4.5 per cent as it reported an increase in profit and revenue in the final quarter of 2012. But investors weren't impressed by the numbers; the stock opened down 6 per cent at $43.10.

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Overnight, Japan's Nikkei rallied 2.6 per cent, climbing for the seventh day in a row and reaching a fresh multi-year high as the yen fell against the U.S. dollar. The country released a revision to fourth-quarter gross domestic product to show an annual 0.2-per-cent increase, much better than last month's initial reading of a 0.4-per-cent contraction. It also said its current account deficit rose in January.

Traders also absorbed more data from China overnight. Its exports rose 21.8 per cent in February, down slightly from January's 25 per cent but beating low expectations given that the period encompasses the Lunar New Year holidays, when manufacturers traditionally close. Imports plunged 13.8 per cent, but that was met with little concern because of the impact of the holidays.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More


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