Equity markets in Toronto were sharply lower Tuesday amid plunging shares of big potash producers after a Russian-based rival broke up a European marketing group that controls about 43% of global exports.
The S&P/TSX Composite Index fell 70.90 points – off its lows of the morning -- to greet noon at 12,598.14
The Canadian dollar eased 0.3 cents to 97.13 cents U.S.
Russia's OAO Uralkali plans to run at full capacity after changing its trading policy in a move that signals potash prices will weaken.
Chief Executive Officer Vladislav Baumgertner said that the change in the company's trading policy could take potash prices to less than $300 U.S. a ton, which is at least 25% below the current contract price for China.
Shares in the rival Canpotex potash marketing group were down sharply, as PotashCorp of Saskatchewan the most active TSX stock, plunged $8.57, or 22%, to $30.33, shares in Agrium dropped $4.58, or 4.9%, to $89.26
The base metals sector was also a weight on the TSX, while the September copper contract on the Nymex moved down six cents to $3.04 U.S. a pound. Teck Resources fell 27 cents to $24.43.
Turquoise Hill Resources fell 28 cents, or 6.4%, to $4.10 after hitting a new 52-week low of $3.99. The loss added to a drop of 20% Monday after it said it's expecting a delay in developing its Oyu Tolgoi copper project in Mongolia due to the government's financing process. Turquoise Hill's primary operation is its 66% interest in the Oyu Tolgoi copper-gold-silver mine.
Gold shares sank, including Barrick Gold Corp., which fell 35 cents to $17.74.
The energy sector was down as Niko Resources declined 26 cents to $7.09.
Financials were also lower as TD Bank Group said it expects recent severe flooding in Alberta and the Toronto area will cause a loss in its insurance business in the third quarter. It says TD Insurance faces an after-tax net loss of between $240 million to $290 million for the period, which includes the months of June and July. TD fell 88 cents to $88.01.
On the earnings front, Thomson Reuters Corp. says its adjusted earnings for the latest quarter were 48 cents a share, which beat analyst estimates. But its shares were down 90 cents to $35.47.
WestJet says it earned net income of $44.7 million in the second quarter, or 34 cents per diluted share, a penny higher than analyst estimates. That compared to $42.5 million, or 31 cents per share, a year ago.
Revenue came in at $843.69 million, an increase from $809.28 million a year ago but below an analyst estimate of $860.7 million and its shares slipped 23 cents to $19.90.
On the economic front, Statistics Canada reported this morning that its industrial product price index rose 0.3% in June, as a result of higher prices for motor vehicles and other transportation equipment as well as petroleum and coal products.
The agency also reports its raw materials price index advanced 0.3% during the same month, mostly because of higher prices for animals and animal products and crude oil.
ON BAYSTREET
The TSX Venture Exchange swooned 4.43 points to 920.26
The 14 Toronto subgroups were evenly split between gainers and losers, although materials plummeted 4.2%, while global base metals fell 1.4%, and metals and mining backtracked 1.1%.
The seven gainers were led by health-care, ahead 0.8%, information technology, up 0.7%, and industrials, better by 0.6%.
ON WALLSTREET
U.S. stocks staged a modest rebound early Tuesday, helped by a strong housing report.
The Dow Jones Industrials remained positive 15.17 points – off its highs of the morning – to reach midday at 15,537.10
The S&P 500 index had gained 4.89 points to 1,690.22. The NASDAQ improved 27.46 points to 3,626.60
Shares of Herbalife rallied after the nutritional supplement company reported better-than-expected earnings and raised its guidance.
Goodyear Tire and Rubber Company blew past analyst estimates, sending its shares up more than 10%.
Shares of Pitney Bowes surged on news that Apollo Global Management will acquires its management services business for about $400 million U.S. in cash. Pitney Bowes also reported better-than-expected earnings.
Dow component Pfizer reported a drop in earnings that nonetheless beat analysts' forecast by a penny a share.
Sprint reported a loss for the quarter as it shut down its Nextel network and moved millions of subscribers to its Sprint platform. The loss comes even as the company boosted sales.
Shares of BP fell after the company's quarterly results missed market expectations. BP reported a drop in earnings due, in part, to lower oil prices and higher taxes. BP is also expecting to pay more in U.S. settlements related to the massive Gulf of Mexico oil spill in 2010.
Barclays shares fell after the bank revealed it will be selling $8.9 billion U.S. in new shares at a discounted price to existing shareholders to meet capital requirements set out by regulators.
Shares of Mosiac Co., a major U.S. potash producer, plunged after a Russian potash producer pulled out of a cartel, a move expected to send prices of the fertilizer raw material sharply lower.
CBS and Time Warner Cable agreed to continue negotiations on the fee the cable operator pays to carry Showtime as well as CBS in the nation's largest markets. The new deadline that could see three million Time Warner Cable customers lose the networks was pushed back to Friday.
U.S. investors are receiving a variety of economic and corporate news as they await the latest reading on economic growth and statement from the Federal Reserve on Wednesday, as well as Friday's jobs report for July.
The S&P/Case-Shiller home price index jumped 12.2% in May. That marked the biggest year-over-year gain since 2006, near the peak of the housing bubble.
Confidence among U.S. consumers declined more than forecast in July after reaching a five-year high a month earlier as Americans grew more pessimistic about the outlook for the economy and employment.
The U.S. Conference Board’s index of sentiment decreased to a reading of 80.3 from a revised 82.1 the prior month that was stronger than initially estimated, figures from the New York-based private research group showed today. The median forecast in a survey of economists was for a reading of 81.3.
Prices for the 10-year U.S. Treasury were lower, raising yields to 2.59% from Monday’s 2.58%. Treasury prices and yields move in opposite directions.
Oil prices faltered $1.60 to $102.95 U.S. a barrel.
Gold prices were $2.80 lower to $1,325.60 U.S. an ounce.
Related Stories
