Profit taking sends TSX sharply lower; higher US$ sends commodities, C$ lower
20 minutes ago via Canadian Press
TORONTO - The Toronto stock market sustained triple-digit losses for a fourth consecutive session Wednesday as a rising U.S. dollar sent commodity prices and the Canadian dollar sharply lower.
The S&P/TSX composite index was off early lows as financial stocks turned positive, but at mid-afternoon the index had tumbled 124.7 points to 10,929.9. Investors were also discouraged as hopes for recovery of the American housing sector suffered a setback, further raising doubts about the strength of the U.S. economy.
Sales of new homes in the U.S. dropped unexpectedly last month, falling 3.6 per cent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists had expected a rise of 2.6 per cent. The median sales price of US$204,800 was off 9.1 per cent from a year earlier, but up 2.5 per cent from August.
The TSX was already down about four per cent over the last three sessions before this latest slide. Analysts pointed out that a round of profit taking wasn't surprising, considering the TSX had gained about 50 per cent since the lows of March with hardly a break.
But that gain was based on hopes for a strong economic rebound being in place by late this year and recent economic data, including a report Tuesday that showed an unexpected drop in U.S. consumer confidence, have shaken those hopes.
"I'm expecting that the recovery won't be as robust as everybody thinks it is," said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver.
"If I step back and ask what should I be expecting in the next six months to a year, I think you have to say to yourself, maybe this little puppy is not as robust as we thought it would be. We might trend down from the highs that we have had recently."
The resurgent greenback sent the Canadian dollar down 0.98 of a cent to 92.82 cents US after going as low as 92.64 cents US.
All TSX sectors were negative with the energy group down 1.96 per cent as the December crude contract on the New York Mercantile Exchange dropped $1.98 to US$77.57 a barrel despite data from the American Petroleum Institute showing a decline of 3.5 million barrels in crude inventories last week. EnCana Corp. (TSX:ECA) declined $1.64 to C$60.59 on the TSX.
Nexen Inc. (TSX:NXY) reported that its profit in the third quarter fell to $122 million or 23 cents a share, down 86 per cent from the same time last year, beating analyst estimates by a penny a share. Nexen's revenue was cut in half to $1.1 billion and its shares were down 28 cents to $23.71.
Mining stocks were also under pressure as the December copper contract on the New York Mercantile Exchange backed off 6.85 cents to US$2.93 a pound and the base metals sector lost 5.3 per cent. Teck Resources (TSX:TCK.B) dropped $1.95 to $31.11.
Sherritt International Corp. (TSX:S) reported that net income fell to $55.9 million or 19 cents per share in the third quarter, down from $133.1 million or 45 cents per share a year earlier because of lower commodity prices "largely due to the impact of relatively weakened global industrial demand on the base metals market."
Revenue fell 18.5 per cent to $389.6 million and its shares stepped back 43 cents to $6.82.
The gold sector was down 1.37 per cent as December bullion on the Nymex lost $4.90 to US$1,030.50 an ounce. Kinross Gold Inc. (TSX:K) faded 60 cents to $19.70.
Groups outside the commodity sectors were also down sharply.
The tech sector declined 2.38 per cent and Research In Motion Ltd. (TSX:RIM) moved down $1.84 to $65.86 while the industrial sector moved down 1.3 per cent with Canadian National Railways (TSX:CNR) down 59 cents to $51.28.
The TSX Venture Exchange eased 37.08 points to 1,269.38.
Economic data also depressed New York markets and the Dow Jones industrial average was off 52.6 points to 9,829.6.
The Nasdaq composite index gave back 38.23 points to 2,077.86 while the S&P 500 index was down 12.7 points to 1,050.7.
In other Canadian earnings news, Maple Leaf Foods Inc. (TSX:MFI) shares ran up 49 cents to $10.95 as the company said quarterly net income came in at $22.5 million or 17 cents a share, compared to a net loss of $12.9 million or 10 cents a share a year ago. Last year's third-quarter had felt the brunt of a Listeria-induced recall at a Maple Leaf plant in Toronto.
Quarterly revenues for the company dipped to $1.29 million from $1.34 million last year.
Methanex Corp. (TSX:MX) fell to a third-quarter loss of $831,000 or a penny per share as revenue fell due to lower methanol prices. Analysts were expecting a loss of four cents a share and its shares were down 25 cents to $18.74.
In the U.S., ConocoPhillips said Wednesday that low natural gas prices and thin margins from its gasoline refining business drove profits down 71 per cent in the third quarter, but the oil company is ramping up production as crude prices jump.
The third-largest U.S. oil company made $1.5 billion, or $1 per share, for the quarter while revenue totalled $41.3 billion, down from $71.4 billion in the year ago quarter.
The S&P/TSX composite index was off early lows as financial stocks turned positive, but at mid-afternoon the index had tumbled 124.7 points to 10,929.9. Investors were also discouraged as hopes for recovery of the American housing sector suffered a setback, further raising doubts about the strength of the U.S. economy.
Sales of new homes in the U.S. dropped unexpectedly last month, falling 3.6 per cent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists had expected a rise of 2.6 per cent. The median sales price of US$204,800 was off 9.1 per cent from a year earlier, but up 2.5 per cent from August.
The TSX was already down about four per cent over the last three sessions before this latest slide. Analysts pointed out that a round of profit taking wasn't surprising, considering the TSX had gained about 50 per cent since the lows of March with hardly a break.
But that gain was based on hopes for a strong economic rebound being in place by late this year and recent economic data, including a report Tuesday that showed an unexpected drop in U.S. consumer confidence, have shaken those hopes.
"I'm expecting that the recovery won't be as robust as everybody thinks it is," said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver.
"If I step back and ask what should I be expecting in the next six months to a year, I think you have to say to yourself, maybe this little puppy is not as robust as we thought it would be. We might trend down from the highs that we have had recently."
The resurgent greenback sent the Canadian dollar down 0.98 of a cent to 92.82 cents US after going as low as 92.64 cents US.
All TSX sectors were negative with the energy group down 1.96 per cent as the December crude contract on the New York Mercantile Exchange dropped $1.98 to US$77.57 a barrel despite data from the American Petroleum Institute showing a decline of 3.5 million barrels in crude inventories last week. EnCana Corp. (TSX:ECA) declined $1.64 to C$60.59 on the TSX.
Nexen Inc. (TSX:NXY) reported that its profit in the third quarter fell to $122 million or 23 cents a share, down 86 per cent from the same time last year, beating analyst estimates by a penny a share. Nexen's revenue was cut in half to $1.1 billion and its shares were down 28 cents to $23.71.
Mining stocks were also under pressure as the December copper contract on the New York Mercantile Exchange backed off 6.85 cents to US$2.93 a pound and the base metals sector lost 5.3 per cent. Teck Resources (TSX:TCK.B) dropped $1.95 to $31.11.
Sherritt International Corp. (TSX:S) reported that net income fell to $55.9 million or 19 cents per share in the third quarter, down from $133.1 million or 45 cents per share a year earlier because of lower commodity prices "largely due to the impact of relatively weakened global industrial demand on the base metals market."
Revenue fell 18.5 per cent to $389.6 million and its shares stepped back 43 cents to $6.82.
The gold sector was down 1.37 per cent as December bullion on the Nymex lost $4.90 to US$1,030.50 an ounce. Kinross Gold Inc. (TSX:K) faded 60 cents to $19.70.
Groups outside the commodity sectors were also down sharply.
The tech sector declined 2.38 per cent and Research In Motion Ltd. (TSX:RIM) moved down $1.84 to $65.86 while the industrial sector moved down 1.3 per cent with Canadian National Railways (TSX:CNR) down 59 cents to $51.28.
The TSX Venture Exchange eased 37.08 points to 1,269.38.
Economic data also depressed New York markets and the Dow Jones industrial average was off 52.6 points to 9,829.6.
The Nasdaq composite index gave back 38.23 points to 2,077.86 while the S&P 500 index was down 12.7 points to 1,050.7.
In other Canadian earnings news, Maple Leaf Foods Inc. (TSX:MFI) shares ran up 49 cents to $10.95 as the company said quarterly net income came in at $22.5 million or 17 cents a share, compared to a net loss of $12.9 million or 10 cents a share a year ago. Last year's third-quarter had felt the brunt of a Listeria-induced recall at a Maple Leaf plant in Toronto.
Quarterly revenues for the company dipped to $1.29 million from $1.34 million last year.
Methanex Corp. (TSX:MX) fell to a third-quarter loss of $831,000 or a penny per share as revenue fell due to lower methanol prices. Analysts were expecting a loss of four cents a share and its shares were down 25 cents to $18.74.
In the U.S., ConocoPhillips said Wednesday that low natural gas prices and thin margins from its gasoline refining business drove profits down 71 per cent in the third quarter, but the oil company is ramping up production as crude prices jump.
The third-largest U.S. oil company made $1.5 billion, or $1 per share, for the quarter while revenue totalled $41.3 billion, down from $71.4 billion in the year ago quarter.
