OIL :TSX weighed down by falling energy stocks; N.Y. mixed on latest earns
TORONTO _ Falling commodity stocks helped push the Toronto stock market lower Thursday as oil and metal prices lost ground.
The S&P/TSX composite index was 24.3 points lower at 11,417.7.
The Canadian dollar was down 0.43 of a cent to 95.17 cents US as the Bank of Canada said it expects that the continuing strong dollar will undercut exports and that growth will fall below what might have been expected.
In other economic news, Statistics Canada says retail sales climbed 0.8 per cent in August to $34.5 billion, with the bulk of the increase coming from higher sales at gasoline stations and new car dealers.
Otherwise, sales were flat. Economists had expected sales to rise 0.5 per cent, excluding autos.
The TSX energy sector was off 0.47 per cent as oil prices backed away from Wednesday´s close above US$81 a barrel, the highest level in a year, with the December crude contract on the New York Mercantile Exchange down 45 cents to US$80.92 a barrel. Prices had surged more than US$2 on Wednesday after U.S. data showed another large drawdown of gasoline inventories last week. Canadian Natural Resources (TSX:CNQ) gave back 83 cents to $75.26.
Investors also took in major acquisition activity in the oilpatch. Canadian oil and gas producer Harvest Energy Trust (TSX:HTE.UN) has agreed to a proposed takeover by state-owned Korea National Oil Corp. in a deal valued at $4.1 billion.
Harvest units surged $2.42 or 33 per cent to $9.72.
The gold sector was down 0.3 per cent as the December gold contract on the Nymex faded $3.10 to US$1,061.40 an ounce. Kinross Gold Corp. (TSX:K) lost 39 cents to $22.80.
The base metals sector was ahead 0.5 per cent as December copper dipped two cents to US$3.02 a pound after charging ahead more than 10 cents on Wednesday. Teck Resources (TSX:TCK.B) ped 51 cents to $34.82.
Market heavyweight Potash Corporation of Saskatchewan Inc. shook off early losses to move higher despite disappointing earnings. The company´s shares were up $1.71 to $109.01 after it said continuing caution among buyers around the world pushed down third-quarter profits by nearly 80 per cent. Net income was US$248.8 million or 82 cents a share, a from $1.2 billion or $3.93 per share in the same period last year.
Sales fell to US$1 billion compared with US$3.1 billion in the same period last year.
The TSX Venture Exchange was 8.58 points lower to 1,334.01.
News that China´s economy expanded at a brisk 8.9 per cent in the third quarter failed to impress investors, some of whom expected growth to come in at nine per cent.
But analysts pointed out there was some particularly good news in the Chinese data.
"It´s not entirely government stimulus led and capital expenditures by government ministries _ you´re actually starting to see a pickup in earnings by Chinese companies for the first time in a year or so," observed Gavin Graham, director of investments at BMO Asset Management.
"So maybe it´s actually spreading out from just being government stimulus to actually having some private sector participation as well."
New York markets were mainly higher amid a worse-than-expected report on jobless claims and the latest round of earnings.
The Dow Jones industrial average gained 52.7 points to 10,002.
The Nasdaq composite index lost 9.77 points to 2,140.96, weighed down by a disappointing earnings report from online marketplace operator eBay, which reported Wednesday after the close that its third-quarter net income fell 29 per cent to US$350 million or 27 cents a share as operating expenses climbed.
Revenue in eBay´s main marketplaces business dipped one per cent year over year and its shares fell $1.37 to US$23.66.
The S&P 500 was down 0.05 of a point to 1,081.35 as new unemployment claims rose to a seasonally adjusted 531,000 last week, from an upwardly revised 520,000 the previous week and more than the 519,000 expected by economists.
Upbeat reports from Dow Jones industrial average components manufacturer 3M Co., insurer Travelers Cos., telecommunications provider AT&T Inc. and fast-food chain McDonald´s Corp. encouraged investors.
However, mixed earnings signals continue to show an economy in flux, and could give traders reason to pause in their relentless run-up in stocks that began in March.
"The market is way ahead of itself as far as the real economy is concerned and almost certainly we´re due for a pullback," added Graham.
"The spin on this is oh, look, they´re beating expectations. The fact that the expectations have been deliberately lowered and are very cautious and you´re still down 20 per cent from where you were a year go, is neither here nor there. The market is quote, unquote beating the expectations."
In other corporate news, units in Precision Drilling Trust (TSX:PD.UN) were down 11 cents to $7.48 as it saw third-quarter profit fall to $72 million, a 13 per cent decline from the same time last year attributed to slow drilling activity throughout the North American energy industry.
Corus Entertainment Inc. (TSX: CJR.B) posted a fourth- quarter profit of $18.7 million or 23 cents a share, up from $17.4 million or 21 cents a share last year. Revenue increased to $195.2 million from $185.8 million as an increase from television more than offset a decline from radio. Its shares dipped 40 cents to $17.40.
In overseas trading, Japan´s Nikkei 225 stock average fell 0.6 per cent and Hong Kong´s Hang Seng ped 1.1 per cent.
In China, the Shanghai index lost 0.5 per cent.
London´s FTSE 100 index lost 0.82 per cent, Frankfurt´s DAX ped 1.07 per cent while the Paris CAC 40 was down 1.25 per cent.
