The Toronto stock market was lower Thursday as commodities prices fell back amid a higher U.S. dollar and worries that Europe’s sovereign debt problems could hurt demand for resources.
The S&P/TSX composite index was on the downside by 47.84 points by the close Thursday to 13,181,23
The Canadian dollar retreated 0.08 cents to 99.43 cents U.S.
Moody’s Investors Service warning put Europe’s debt crisis back to the forefront of investors’ concerns. Following Tuesday’s similar warning on Belgium from rival agency Standard & Poor’s, investors are again nervous that the debt crisis will spread, particularly to Spain, after bailouts of Greece and Ireland so far this year.
Risk aversion drove investors to the safe haven status of the U.S. dollar, which further weakened commodities.
Analysts said that continued nervousness about government debt could continue to drive the greenback higher, applying even more pressure to commodity prices.
In the oil patch, Suncor Energy declined 44 cents to $36.48 while Imperial Oil was 18 cents lower to $38.10.
Mining stocks also headed lower as metal prices stepped back with the March copper contract on the Nymex down two cents to $4.12 U.S. a pound. The base metals sector was down with Teck Resources down 34 cents to $56.20 and Equinox Minerals lost 14 cents to $5.79.
The gold sector lost strength as Goldcorp. fell 69 cents to $45.29 while Goldcorp Inc. fell 62 cents to $45.36.
Financials were generally weak as Scotiabank lost 31 cents to $56.85 but Manulife Financial pulled ahead 33 cents to $16.98.
George Weston Ltd., the Toronto-based food processor and distributor and majority owner of the Loblaw supermarket chain, says it will pay a special one-time dividend totaling $1 billion to its shareholders. The payment will amount to about $7.75 per share for shareholders of record at the close of business on Jan. 18. Its shares jumped $3.48, or 4.4%, to $82.86.
And Agnico-Eagle Mines Ltd. said it will boost its dividend to 16 cents per share per quarter or 64 cents U.S. per year, up from its current payment of an annual dividend of 18 cents per share. Its shares fell $4.63, or 5.7%, to $76.16.
Elsewhere, travel company Transat A.T. Inc. says profits rose to $52.4 million in the fourth-quarter as it booked lower non-cash losses related to fuel hedging. Revenues were $778.6 million, up from $719.7 million and its shares gained $1.73, or 9.8%, to $19.48.
Shares in Mosaid Technologies Inc. gained $1.85, or 6.8%, to $29.13 after the technology licensing company said it has reached a five-year patent agreement with IBM Corp., ending pending litigation between the two companies. The terms were not released.
On the economic ledger, Statistics Canada said this morning that non-residents acquired a further $9.5 billion of Canadian securities in October, mainly adding sizeable amounts of corporate bonds and stocks to their portfolios.
The agency also said that Canadian investment in foreign securities decelerated to $821 million, with investment in U.S. government Treasury bills largely offset by sales of foreign equities.
ON BAYSTREET
The TSX Venture Exchange gained 4.87 points to 2,105.81, while the Nasdaq Canada index squeezed out a gain of 0.41 points to 744.89
In Toronto, nine of the 14 subgroups were negative at session’s end. Gold stumbled 1.5%, metals and mining stocks tumbled 1.3%, while materials were off 1.1%.
The five gaining groups were led by consumer staples, up 0.6%, utilities, ahead 0.5%, and industrials, up 0.4%
ON WALLSTREET
In New York, equities closed higher Thursday, as investors looked on the brighter side of mixed reports on housing and jobs that came out before the opening bell.
The Dow Jones Industrials gained 41.78 points to end the day at 11,499.20
The S&P 500 moved higher by 7.64 points to 1,242.87. The Nasdaq Composite Index added 20.09 points to 2,637.31
Gains were broad-based in the Dow, with 25 of its 30 components closing higher.
Despite Thursday's mixed reports, economic data have been relatively upbeat lately. Stocks have performed well in December so far, with the three major indexes up 2% to almost 4%.
Trading is expected to be quiet over the next few weeks, and some traders are starting to close up their portfolios ahead of year's end. Many market participants will start taking holiday vacation next week, and few economic reports are on tap for the remainder of the year.
But the Dow is hitting some resistance at 11,500, experts say which is a technical and psychological point. The Dow has flirted with that level and gone above it briefly this week, but it has yet to remain there for an extended period.
Trading may be volatile Thursday due to traders adjusting their portfolios ahead of Friday's so-called "quadruple witching."
The term refers to the phenomenon that takes place four times a year, when several derivatives contracts expire at the same time -- those tied to market index futures, market index options, stock options and stock futures.
Shares of Visa and MasterCard fell more than 6% after the Fed proposed a new cap on debit card network fees.
Alcoa shares were up 3.1% following bullish commentary Wednesday night from Jim Cramer on his CNBC show "Mad Money."
Federal Express reported third-quarter earnings and sales that missed forecasts. FedEx earned $1.16 U.S. a share, missing estimates by 15 cents U.S. Revenue rose 12% to $9.63 billion U.S., but that amount also missed analysts forecasts -- which had called for $9.7 billion U.S.
The shipping company, which had its busiest shipping day Monday, reined in its forecast for the current quarter, but raised its outlook for fiscal 2011. Shares of FedEx were 1.6% higher in late trade.
General Mills reported profits and sales that also missed forecasts. Revenue was up 1% in the quarter, but it came in just barely under estimates at $4.07 billion U.S. Earnings per share, excluding a one-time tax benefit, totaled 76 cents U.S., missing forecasts by two cents U.S.
Shares were up 0.4%.
Earnings reports from BlackBerry maker Research In Motion and Oracle were on deck after the market closes.
Economically speaking, the number of Americans filing for initial unemployment benefits fell 3,000 to 420,000 in the latest week, the U.S. Labor Department said. Meanwhile, continuing claims -- those workers who have filed unemployment claims for their second week or more -- were up 22,000 to 4.13 million.
Government figures showed housing starts fell 5.8% to a 555,000 annual rate in November, better than the 545,000 starts that economists were expecting.
Building permits declined 14.7% year-over-year to 530,000 in November, the government said. Analysts surveyed by Briefing.com expected 560,000 building permits to be issued.
The price on the benchmark 10-year U.S. Treasury moved up again, lowering the yield to 3.48% from Wednesday’s 3.52%. Treasury prices and yields move in opposite directions.
Oil fell 81 cents a barrel to $87.81 U.S.
Gold futures for February delivery fell $14.20 to settle at $1,372 an ounce.
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