Equity markets in Toronto fell sharply on Friday, pushed lower by a slump in Valeant Pharmaceuticals International Inc after it cut ties with a specialty pharmacy accused of helping it inflate revenue, and by retreats in heavyweight banks.
The S&P/TSX composite index capsized 262.71 points, or 1.9%, to close the day and the week at 13,529.17. The index lost 3% on the week and gained 1.7% through October.
The Canadian dollar recovered 0.55 cents at 76.50 cents U.S.
Health-care stocks led Canadian equities lower, as Valeant extended its monthly rout to over 40% amid intense scrutiny over its business practices. The stock had been one of the best performers in Canada through the first half of the year and briefly became the biggest company in the country by market capitalization.
Valeant’s been the primary drag on the market. The embattled drug maker said Friday it will terminate its relationship with Philidor Rx Services, the closely-associated pharmacy that Valeant has used to distribute its products. The decision came after it was reported Philidor altered doctors’ prescriptions to wring more reimbursements from U.S. health insurers.
It finished down 17.7%, or $26.19, to $122.04 on Friday.
Bombardier Inc. Thursday reported a $4.9-billion loss in part due to writedowns related to its oft-delayed C Series jetliner. The aerospace company’s quarterly loss was the third- largest in Canada since the third quarter of 2007, according to data compiled by Bloomberg.
On Friday, Bombardier rose 6.8%, or nine cents, to $1.42.
Husky Energy Inc. shares fell to the lowest in a decade, after the Canadian oil producer said it would start paying its dividend in stock.
The Calgary-based company dropped 12.8%, or $2.60, to $17.67, the lowest intraday price since April 2005. In announcing third-quarter earnings results, Husky said that starting January, it will pay its quarterly dividend in shares to preserve cash and give the company financial flexibility.
Energy companies are altering their dividend policies as they eliminate workers, shelve projects and sell assets to withstand a rout in oil prices that has extended 16 months. U.S. crude is hovering below $50 U.S. a barrel, less than half its high last year.
The financial sector fell, led by a 2.6% retreat from Royal Bank of Canada and a 2.7% drop from Toronto-Dominion Bank.
On the economic slate, Statistics Canada reported that Gross Domestic Product edged up 0.1% in August, following increases of 0.4% in June and 0.3% in July. The agency mainly attributes growth in August to gains in manufacturing, mining, quarrying, and oil and gas extraction and retail trade.
ON BAYSTREET
The TSX Venture Exchange finished 2.38 points to the good, at 542.03
All but one of the 13 TSX subgroups remained negative on the day, as health-care dipped 3.4%, financials sank 1.9%, and gold slid 1.7%.
The lone gainer was metals and mining, up 3.7%
ON WALLSTREET
U.S. stocks ended lower Friday but closed out their best month in four years, helped by a recovery in oil prices and hopes of easy monetary policy.
The Dow Jones industrial average fell 92.26 points to 17,663.54, with Chevron leading advancers and Pfizer the greatest laggard.
The S&P 500 dropped 4.11 points to 2,085.30, with energy leading six sectors higher and financials the greatest laggard.
The NASDAQ index eased 9.14 points to 5,065.13
On the earnings front, AbbVie, Colgate-Palmolive and Exxon Mobil all reported before the bell.
Exxon Mobil reported quarterly results that beat expectations on both the top and bottom line, but profit declined 47% as low oil prices weighed.
Chevron announced plans to cut its workforce by 6,000 to 7,000, while posting earnings that topped expectations.
Despite the losses Friday, the major averages had their best month since October 2011. The S&P 500 closed up 8.3% for the month, while the Dow ended nearly 8.5% higher for the month. The NASDAQ composite closed the month up nearly 9.4%.
In economic news, personal income rose 0.1% in September, while personal consumption rose 0.1%.
The employment cost index rose 0.6% in the third quarter.
The Fed's preferred inflation measure, the personal consumption expenditures price index, slipped 0.1% in September. The decline marked the first drop since January.
The final read for October consumer sentiment came in at 90.0.
Prices for 10-year U.S. Treasuries were higher, lowering yields to 2.15% from Thursday’s 2.18%. Treasury prices and yields move in opposite directions.
Oil prices regained 32 cents a barrel to $46.38 U.S.
Gold prices slid $4.26 to $1,141.71 U.S. an ounce.
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