Canadian stocks fell a fourth day on Monday as financial services companies declined and raw-materials producers slipped with metals prices.
The S&P/TSX composite index fell 70.68 points – off its lows of the day --to close at 13,482.62. Even so, the index has lost 7.9% this year, trailing only Singapore and Greece among developed markets.
The Canadian dollar hiked 0.16 cents at 75.33 cents U.S.
Weaker demand for coal, iron and other commodities from declining heavy industries led to a slump in imports in China, one of the world’s largest consumers of raw-materials. The nation is Canada’s second-largest trading partner after the U.S. The rising prospect for higher American interest rates led to a slump in financial services shares.
Canadian equities have lagged most peers as the country’s resource-dominated market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest rate hike from the U.S. Federal Reserve.
Brookfield Asset Management Inc., Canada’s largest alternative asset manager, lost 5.6% to $43.25, to lead financial stocks lower, reversing a two-day advance for the group. Toronto-Dominion Bank and Bank of Nova Scotia, among the nation’s largest lenders, slipped, TD down 0.4% to $54.44, while Scotiabank trundled lower 1.1% to $60.99.
Valeant Pharmaceuticals International Inc. increased 3.7% to $113.21, for a second day of gains, after rebounding from a 2013 low. The drugmaker will host an investor call Tuesday to provide an update on its operations including the transition from its prior relationship with specialty pharmacy Philidor. Valeant has lost 68% from an Aug. 5 high amid pressure over how it prices its drugs.
PrairieSky Royalty Ltd advanced 0.5% to $26.12, following news that Canadian Natural Resources Ltd will sell most of its royalty assets to the company in a $1.8-billion deal, joining other oil producers in shedding assets to weather a slump in crude prices.
Canadian Pacific Railway Ltd., the second- biggest railroad in Canada, rose 5.7% to $188.79, after it was reported that it is exploring a takeover of U.S. carrier Norfolk Southern Corp. in a fresh attempt to consolidate the North American industry.
Canadian Pacific is raising financing and has held early stage merger talks with Norfolk Southern, which is valued at about $24 billion, said two of the people, who asked not to be identified because deliberations are private. Discussions are preliminary and talks may not progress or lead to a deal, they said.
Norfolk Southern shares surged 11% to $88.62 U.S. in New York with the news.
On the economic front, Canada Mortgage and Housing Corporation said housing starts totaled 206,089 units in October compared to 202,793 in September.
ON BAYSTREET
The TSX Venture Exchange fell 0.56 points to 533.72
Eight of the 13 TSX subgroups were lower on the day, as metals and mining skidded 2.5%, real-estate moved lower 2.4%, and consumer discretionaries fell 1.4%,
The five gainers were led by gold, surging 2.6%, industrials, up 1.4%, and materials, ahead 1.2%
ON WALLSTREET
U.S. equities closed lower Monday as investors weighed a possible Federal Reserve rate hike in December.
The Dow Jones industrial average plunged 179.85 points, or 1%, to close at 17,731.48, led lower by Caterpillar with DuPont and Walt Disney the only advancers.
The S&P 500 fell 18.6 points, or 1.4%, to 2,080.60, with consumer discretionary leading nine sectors lower and utilities the only advancer.
The NASDAQ index stumbled 47.16 points to 5,099.96
In corporate news, Plum Creek Timber, Dish Network and Hertz Global reported earnings before the bell. SunEdison, Lions Gate and Rackspace are all due after the bell.
DuPont named Edward Breen as its permanent chairman and chief executive officer.
L Brands was downgraded to "neutral" from "overweight" at JPMorgan Chase, based in part on unfavorable apparel industry trends.
The odds of the Fed raising rates for the first time in about a decade rose dramatically after the October non-farm payrolls report — released Friday — showed the U.S. economy added 271,000 jobs.
According to the CME Group, the probability of a December rate hike rose from about 58% to about 70%.
In corporate news, Plum Creek Timber, Dish Network and Hertz Global reported earnings before the bell. SunEdison, Lions Gate and Rackspace are all due after the bell.
DuPont named Edward Breen as its permanent chairman and chief executive officer.
L Brands was downgraded to "neutral" from "overweight" at JPMorgan Chase, based in part on unfavorable apparel industry trends.
Prices for 10-year U.S. Treasuries fell, raising yields to 2.35% from Friday’s 2.33%. Treasury prices and yields move in opposite directions.
Oil prices faded 32 cents a barrel to $43.97 U.S.
Gold prices recovered $1.45 to $1,091.25 U.S. an ounce.
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