Stocks in Toronto slumped on Thursday, paring the best monthly gain since February, as Bombardier Inc. plunged after receiving a $1-billion investment from the Quebec government and resource producers sank on the prospect of higher interest rates in America.
The S&P/TSX composite index faded 70.12 points to finish Thursday at 13,793.04
The Canadian dollar gained 0.2 cents at 75.97 cents U.S.
Bombardier, the third worst-performing stock in the S&P/TSX this year with a 68% decline, dropped 17.4% to $1.33, the lowest since Sept. 9.
The jet maker’s late and over-budget C Series program will get an investment from Quebec in exchange for a 49.5% stake and as much as 200 million Bombardier shares, the Montreal-based company said Thursday.
Potash Corp. of Saskatchewan Inc. lost 3% to $27.32, to lead raw-materials producers lower. The world’s largest fertilizer producer by market value cut its full-year profit forecast and shuttering reducing production in response to weaker demand from emerging markets.
Barrick Gold Corp. jumped to 1.6% to a two-month high of $10.31 after reporting better-than-estimated profit after the market close yesterday. Barrick’s lower costs and higher production helped to mitigate the impact of weak metals prices. Some 150 companies are scheduled to report earnings next week.
Gold stocks have rallied 14% in October, on pace for the best performance since January as the prospect of an interest-rate increase from the Fed dimmed during the month amid slowing global economic growth and mixed U.S. data. Gold becomes a less attractive investment when rates rise as the metal doesn’t pay interest.
Valeant Pharmaceuticals International Inc dropped 3.7% to $148.23, as its largest shareholder defended its investment in the embattled drug-maker, saying allegations against the company are false and that there is no legal case preventing ties to a specialty pharmacy.
Fund manager Ruane, Cunniff & Goldfarb Inc, which has a history is entwined with legendary investor Warren Buffett, owns a 9.93% stake in Valeant as of June 30, Thomson Reuters data show. The data also show that the Valeant stake comprises one-third of Ruane, Cunniff & Goldfarb’s overall holdings - a much higher than normal exposure to a single stock.
On the economic slate, Statistics Canada’s industrial product price index declined 0.3% in September, mainly due to lower prices for energy and petroleum products, while the raw materials price index rose 3% in the same month, led by higher prices for crude energy products.
ON BAYSTREET
The TSX Venture Exchange shed 6.44 points to 539.71
Eight of the 13 TSX subgroups were negative on the day, with metals and mining stumbling 7.3%, materials down 3.5%, and gold off 3.3%.
The five gainers were led by information technology, gaining 1.2%, real-estate, up 0.7%, and energy, surging 0.6%.
ON WALLSTREET
U.S. stocks closed lower Thursday, but mostly holding on to the prior day's rally, as investors continued to consider the possibility of a December rate hike and eyed earnings.
The Dow Jones industrial average retreated 23.72 points to 17,755.80, with Apple leading gainers and Intel the greatest laggard.
The S&P 500 dropped 2.07 points to 2,088.28, with utilities leading five sectors lower and health-care leading advancers.
The NASDAQ index settled 24.1 points to 5,071.59, as biotech stocks and semiconductors declined.
Health-care briefly rallied more than 1% to lead S&P 500 advancers, helped by gains of more than 5.5% in Allergan. The firm confirmed that it has been approached by Pfizer and is in talks regarding a potential deal. Shares of both companies were briefly halted. Pfizer closed down nearly 2%.
Semiconductor stocks declined, with the Market Vectors Semiconductor ETF off about 2.5%. Weighing on the sector was NXP Semiconductors, which plunged about 19.7% after reporting revenue that missed expectations and giving below consensus fourth-quarter revenue guidance
Earnings season continued, with Aetna and Time Warner Cable among the companies that reported before the bell.
Baidu, Starbucks, Electronic Arts, LinkedIn, Western Union, Boston Beer, First Solar, Outerwall and SolarCity are among companies due to report after the bell.
The U.S. Federal Reserve issued a post-meeting statement Wednesday that was more hawkish than many expected. In the statement, the central bank downplayed September's concerns about impact from global growth and specifically noted it will be looking for progress in employment and labor when considering whether to raise rates at its December meeting.
In economic news, third-quarter GDP showed an annual rate of 1.5%, slightly missing expectations and below the second-quarter's 3.9%. Weekly jobless claims totaled 260,000.
Pending home sales in September fell 2.3% to its second-lowest reading of 2015.
Prices for 10-year U.S. Treasuries were sharply lower, raising yields to 2.18% from Wednesday’s 2.10%. Treasury prices and yields move in opposite directions.
Oil prices retreated 13 cents a barrel to $45.81 U.S.
Gold prices slid $9.72 to $1,146.38 U.S. an ounce.
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