Translate
Oct. 16, 2009 (Baystreet.ca) --
The Toronto stock market was weak late Friday morning as energy stocks eased a day after crude hit a one-year high while financials lost ground amid disappointing earnings reports from the U.S. financial sector.
As noon neared, the S&P TSX Composite index was down 41.23 points to 11,463.28.
The TSX energy sector was down as the November crude contract on the New York Mercantile Exchange declined. On the TSX, Suncor Inc. declined 72 cents to $39.66.
The TSX financial sector fell with CIBC, down 82 cents to $64.54.
BMO Capital Markets senior economist Jennifer Lee observed the decline happened "even in a month that saw the equity market rally to its highest levels of the year."Most of the deterioration was surprisingly in the `expectations' component, while the view on `current conditions' took a 1.3-point slip."
Consumer sentiment had jumped by eight points last month to its highest level since January 2008.
Despite the TSX losing modest ground for a second day, some analysts think investors will just use the opportunity to buy back in at cheaper prices.
The gold sector limited overall losses on the TSX, rising as Goldcorp Inc. advanced 65 cents to $44.06.
The TSX base metals sector was flat as December copper dipped three cents to $2.83 U.S. a pound.
In other corporate news, Imperial Oil Ltd. is looking at security after several high-profile occupations of Alberta oilsands projects by environmentalists, the company's chief executive said Thursday.
Bruce March said Imperial has always had security in place to keep trespassers out, primarily for safety reasons, but the latest incursions mean Canada's largest oil producer and refiner may have to rethink its strategies. Imperial shares drifted 64 cents lower to $43.69.
Pengrowth Energy Trust said Thursday that it has signed a deal to raise $300 million in an offering of trust units to repay debt and for general corporate purposes.
The 28.8 million units are to be sold at $10.40 per unit and on Friday Pengrowth units traded down 28 cents to $10.40.
Canadian Royalties Inc. showed its support for a takeover proposal from Jien Canada Mining Ltd. Friday after the Chinese company increased its bid. Canadian Royalties signed a support agreement with Jien after a total cash offering of $192 million, including accrued interest on debentures, was put on the table and its shares surged 20 cents or 34.48% to 78 cents.
On the economic front, Statistics Canada reported consumer prices fell 0.9% in September, compared to a year ago, following a 12-month decline of 0.8% in August, and equaling the 0.9% drop in July, the biggest in more than 50 years.
Price stability may give the Bank of Canada room to keep interest rates low. Earlier this month, Australia became the first G-20 nation to raise rates since the global economic crisis began, fueling speculation that policy makers in Ottawa would follow closely behind.
Excluding energy, the CPI rose 1.3% on yearly basis. Core CPI rose 0.2% month-on-month and up 1.4% year-over-year. It was expected to rise 0.2% on a monthly basis and 1.4% on an annual basis.
The Canadian dollar skidded 0.26 cents to 96.34 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, losers outnumbered gainers nine to five. Real-estate stocks fell 1.2%, energy stocks were off 1% and information technology issues plummeted 0.7%.
Gold led the gainers, up 1.5%, materials were up 1.3%, and utilities, up 0.2%.
The TSX Venture Exchange slipped 5.96 points to 1,322.44, while the Nasdaq Canada index lost 12.03 points to 717.10.
ON WALLSTREET
In New York, stocks tumbled Friday morning as disappointment about General Electric and Bank of America's financial results gave investors a reason to retreat after pushing the Dow to a one-year high in the previous session.
The Dow Jones Industrials faded 110.71 points, or 1.1%, by noon to 9.952.23. The S&P 500 index lost 13.01 points to 1,083.55. The Nasdaq composite index gave back 28.02 points to 2,145.27.
The Dow ended Thursday's session at the highest point since Oct. 3, 2008, as higher oil prices propelled energy shares.
The stock market has essentially been on a tear since bottoming in March, with repeated calls for a big 10% to 15% selloff going unmet. Since hitting a more than 12-year low on March 9, the S&P 500 has gained 62% as of Thursday's close.
Bank of America reported a third-quarter loss of 26 cents U.S. per share, which was worse than the loss of 21 cents U.S. per share projected by a Thomson Reuters consensus of analysts.
Bank of America also fell behind expectations on revenue, reporting $26 billion U.S. for the third quarter, compared to the Thomson Reuters forecast of $27.6 billion U.S. BofA shares fell almost 5%.
General Electric reported earnings of 28 cents U.S. per share, which was higher than expected, and revenue of $37.8 billion U.S., which was lower than forecast.
Analysts had expected GE to report third-quarter EPS of 20 cents U.S. and revenue of $39.5 billion U.S. Investors were disappointed as most of the profit gains came from cost-cutting efforts. GE's stock slipped 5% in morning trading.
Google reported results late Thursday that surpassed Wall Street's estimates and said that the worst of the recession is over. Shares gained 3% Friday.
Tech bellwether IBM also posted better-than-expected earnings Thursday. But shares tumbled Friday as investors expressed disappointment with its lower revenue.
Treasury prices inched upward, lowering the yields for the benchmark 10-year note to 3.42% from Thursday's 3.45%. Prices and yields move in opposite directions.
The price of a barrel of oil lost 30 cents to $77.31 U.S.
Gold prices picked up $7 to $1,058 U.S. an ounce.