The Toronto stock market was listless Friday as a weak U.S. manufacturing report added to the debate over whether the U.S. economic recovery has weakened to a point where the Federal Reserve will launch another round of stimulus measures.
The S&P/TSX composite index dropped 11.43 points to 12,051.07 while the TSX Venture Exchange dipped 0.95 of a point to 1,247.13.
The Canadian dollar was up 0.08 of a cent to 100.72 cents (U.S.) .
U.S. markets also fell back with the Dow Jones industrial average down 16.26 points to 13,041.2 after the U.S. Commerce Department said that orders for durable goods rose a seasonally adjusted 4.2 per cent in July. But excluding aircraft and other transportation goods, orders dropped 0.4 per cent. Economists had expected a 2.5 per cent rise.
The Nasdaq composite index was 10.24 points lower to 3,043.16, while the S&P 500 index declined 3.27 points to 1,398.81.
The durable goods data also showed that non-defence capital goods orders excluding aircraft fell by 3.4 per cent month over month in July while an annualized growth rate based on three-month periods plummeted to minus 9.3 per cent.
"This strongly suggests that businesses are slashing their investment spending in response to the fiscal uncertainty and the euro zone crisis," said Paul Ashworth, chief U.S. economist for Capital Economics.
The Fed has been in focus after minutes released Wednesday of the Federal Reserve's last policy meeting showed bankers favoured more stimulus.
But doubts about Fed intentions grew Thursday after St. Louis Federal Reserve Bank president James Bullard said the minutes from the Aug. 1 meeting were stale because the economy had picked up since then.
Adding to uncertainty was Chicago Fed President Charles Evans, who said the Fed should take action to bolster the economy.
Traders also opted for caution amid weak economic activity overseas as HSBC said Thursday that its manufacturing purchasing managers' index for China fell to a nine-month low in July amid weak global demand for the country's exports. And in Europe, the PMI of overall economic activity in the euro zone was also stuck below 50 last month, which means the economy is contracting.
Commodities were mixed and the base metals component was off 0.64 per cent as copper eased one cent to $3.48 (U.S.) following a 12-cent jump over the last three sessions. Capstone Mining gave back six cents to $2.50 while Teck Resources lost 34 cents to $28.76.
The energy sector eased 0.3 per cent even as the October crude contract on the New York Mercantile Exchange erased early losses to advance 32 cents to $96.59 (U.S.) a barrel. Precision Drilling shed 14 cents to $8.20 while Cenovus Energy lost 30 cents to $32.07.
The gold sector fell 0.75 per cent while bullion gave back some of Thursday's $32 (U.S.) rise, down $1.20 to $1,671.60 an ounce. Barrick Gold Corp. faded 35 cents to $37.52.
The financial sector led advancers with Royal Bank ahead 24 cents to $53.53.
European bourses gave up ground with London's FTSE 100 index down 0.45 per cent, Frankfurt's DAX down 0.58 per cent and the Paris CAC 40 off 0.68 per cent.
Overseas, Japan's Nikkei 225 declined 1.2 per cent and China's benchmark Shanghai Composite Index lost one per cent while Hong Kong's Hang Seng shed 1.3 per cent in the wake of the HSBC PMI report.
Elsewhere, South Korea's Kospi declined 1.2 per cent and Australia's S&P ASX 200 was off 0.8 per cent.
In corporate news, South Korea's Samsung won a home court ruling in its global smartphone battle against Apple after judges in Seoul said the company didn't copy the look and feel of the U.S. company's iPhone, and that Apple infringed on Samsung's wireless technology.
However, in a split decision on patents, the panel also said Samsung violated Apple technology behind the bounce-back feature when scrolling on touch screens and ordered both sides to pay limited damages.
The Saputo family's Jolina Capital is selling about half of its stake in Montreal-based TransForce Inc. for $148.4-million, leaving Jolina with 8.4 per cent of the parcel delivery company's common stock. Jolina, which has been the largest shareholder in TransForce, is a holding company controlled by Emanuele (Lino) Saputo, founder of the Montreal-based cheese, dairy and bakery company that bears the family name. Transforce shares lost 68 cents to $18.35.
Resolute Forest Products Inc. will restart its paper mill in Dolbeau-Mistassini, Que. The company, formerly known as AbitibiBowater, says the decision to resume operations at the mill follows approval of electricity sales from Resolute's Mistassini cogeneration plant to Hydro-Quebec, the government-owned provincial power grid. Resolute shares were unchanged at $12.06.
Eli Lilly's potential Alzheimer's disease treatment failed to slow mental decline in two late-stage studies, but combined data from both trials showed promising results in patients with mild-to-moderate cases of the mind-robbing disease. Its shares jumped six per cent to $44.95 (U.S.).