Canadian stocks retreated on Thursday as Valeant Pharmaceuticals International Inc. declined to a two-year low and Magna International Inc. tumbled the most since 2011 on weaker quarterly sales.
The S&P/TSX composite index plummeted 103.04 points to close at 13,558.78
The Canadian dollar dropped 0.11 cents at 75.94 cents U.S.
Valeant sank 14.7% for a third day of losses, to a November 2013 low of $103.37. The drug maker has now lost 69% from an Aug. 5 high amid pressure over how it prices its drugs.
Valeant, briefly the largest stock in the S&P/TSX by market capitalization earlier this year, plunged a record 49 per cent in October after short-seller Citron Research accused Valeant of an Enron-like strategy of recording fake sales using an affiliated pharmacy. Valeant denied the allegation.
Valeant and Turing Pharmaceuticals AG are the focus of two probes in Congress seeking to examine why the companies raised the prices of medications sharply after acquiring them. Jana Partners Wednesday disclosed it had sold its stake in Valeant due to concerns about the company’s changing business model.
Magna, the largest North American auto-parts supplier, tumbled 10.3% to $62.42, as sales slumped 7% in the third quarter, missing analysts’ estimates. This, after blaming weakness in the euro and Canadian dollar against the U.S. dollar for the "significant negative impact" on sales. Magna added that foreign currency translation reduced revenue by about $870 million compared with year-ago figures
Smaller peer Linamar Corp. also tumbled 7.5% to $71.42, after TD Securities analyst Brian Morrison lowered his rating for the stock to a hold.
Magna is among more than 40 companies in the S&P/TSX reporting quarterly earnings today. Penn West Petroleum Ltd. dropped 8.7% to $1.78, as revenue slumped. The company suspended its dividend and cut its workforce by about a third during the quarter.
Paramount Resources Ltd. plunged the most in 15 years, falling 20.3% to $10.98, after reporting a third-quarter loss late Wednesday.
First Quantum Minerals Ltd. slumped 6.8% to $7.13, as copper for December delivery fell nearly 3% in New York. Factory orders in Germany, the third-biggest copper user, unexpectedly dropped for a third month, data showed Thursday. Copper has sunk 20% this year as slowing Chinese growth cut demand.
Hydro One Ltd., Ontario’s largest electricity transmission and distribution company, jumped 5.5% to $21.62, in its trading debut. The Ontario government raised $1.66 billion from the initial public offering, at a price of $20.50 a share. The stock trades under the “H” ticker on the Toronto Stock Exchange.
On the economic slate, Western University’s Ivey Purchasing Managers Index stood by the end of October at 53.1, compared to September’s 53.7 reading, and 51.2 last October.
ON BAYSTREET
The TSX Venture Exchange slumped 2.58 points to 539.58
Seven of the 13 TSX subgroups were lower by day’s end, as metals and mining headed lower 4.1%, gold lost 4%, and consumer discretionary issues faded 2.8%
The half-dozen laggards were led by real-estate, up 1%, while consumer staples and financials each gained 0.3%.
ON WALLSTREET
U.S. stocks closed mostly lower Thursday as investors awaited Friday's key jobs report that could shed light on the timing of a rate hike by the Federal Reserve
The Dow Jones industrial average 4.15 points to 17,863.43, back into negative territory for 2015 in intraday trade, as IBM and Chevron weighed.
The S&P 500 slumped 0.75 points to 2,101.56, with financials leading four sectors higher and energy the greatest laggard.
The NASDAQ index let go of 12.27 points to 5,130.21, as biotech stocks briefly fell more than 2%. Apple also traded lower.
The major averages held mostly lower in choppy trade after struggling to hold opening gains. The indexes are still on track for gains of about 1% or more for the week.
Shares of Facebook held about 4.5% higher after briefly gaining more than 6%. The social media giant reported earnings after Wednesday's close that beat on both the top and bottom line.
In earnings news, Qualcomm posted adjusted quarterly profit of 91 cents U.S. per share, beating estimates by five cents, with revenue also exceeding forecasts. However, the chipmaker gave a current quarter outlook considerably below analyst forecasts, on increasing competition from overseas rivals.
Disney, Kraft Heinz, Monster Beverage, News Corp., Nvidia, Symantec, TripAdvisor, Dreamworks Animation, and Shake Shack are among the companies reporting after the close.
Ahead of Friday's report on October non-farm payrolls, weekly jobless claims came in at 276,000, above expectations.
Third-quarter productivity increased at a 1.6% annual rate, while labour costs rose 1.4%.
U.S. layoffs fell 14% in October from the prior month, a 1.3% decrease year-over-year, according to Challenger, Gray & Christmas.
Prices for 10-year U.S. Treasuries fell, raising yields to 2.24% from Wednesday’s 2.23%. Treasury prices and yields move in opposite directions.
Oil prices fell $1.00 a barrel to $45.32 U.S.
Gold prices slid $3.66 to $1,104.24 U.S. an ounce.
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