VN: TSX takes steep drop as weaker gold, oil prices weigh in
TORONTO — Canadian stocks were hit hard on Thursday, as investors fled from commodities like oil and gold in favour of the rallying greenback.
The S&P/TSX composite index was down 163.98 points, or 1.4 per cent, to 11,473.06, while the TSX venture exchange declined 18.64 points or 1.3 per cent to 1,421.15.
"We saw some jobless numbers early (Thursday) that suggested a more muted recovery and as a consequence there was a flight to liquidity," Michael Sprung, president of Sprung & Co. Investment Counsel Inc. said of the U.S. dollar's rise.
"We've seen it in the past, that whenever there is a hiccup in the perceived recovery, commodities get hit and people want to hold U.S. dollars."
Oil fell one cent to $72.65 U.S. a barrel on the New York Mercantile Exchange, while gold prices lost $28.70 to $1,106.80 U.S. an ounce. The Canadian dollar fell 87 basis points to 93.43 cents U.S..
Losers outpaced gainers by a ratio of three-to-one in Toronto Thursday as seven of 10 sub-indexes closed in negative territory. The materials group tumbled 4.1 per cent, energy stocks dipped 1.3 per cent and financials fell 0.58 per cent.
Potash Corp. of Saskatchewan Inc. helped weigh down trading, falling five per cent to $119.20 on news that rival Belarusian Potash Co. may sign a deal to supply the crop nutrient to China by the end of the month.
Limiting losses during Thursday's session was BCE Inc. The telecom giant advanced 3.5 per cent to $27.30 after announcing it will raise its annual dividend seven per cent and agreed to buy back as much as $500 million in common shares.
"The dividend increase is modestly higher than our expectations of a three-to-four per cent increase, said Peter Rhamey, BMO Capital Markets analyst, in a note to clients. "We view this announcement as positive and continue to prefer BCE over TELUS."
In after-hours trading, Research in Motion Ltd.'s shares climbed more than 12 per cent, on its better-than-expected earnings report announced after the closing bell.
Investors south of the border were spooked by an unexpected increase in U.S. jobless claims last week, but also a disappointing profit forecast from FedEx Corp., and Citigroup Inc.'s discounted stock sale.
The Dow Jones industrial average was off 132.86 points or 1.3 per cent to 10,308.26.
The S&P 500 lost 13.10 points or 1.2 per cent to 1,096.08 and the Nasdaq composite index closed at 2,180.05, down 26.86 points or 1.2 per cent.
On a more positive note, the U.S. Conference Board announced its index of leading indicators rose more than forecast in November, as did a measure of manufacturing in Philadelphia.
