The Toronto stock market was well off its lows of the day, but still finished in the red Thursday, amid fresh reminders of the fragility of the U.S. economy while oil prices plunged on word that a large amount of crude is being released from strategic reserves.
The S&P/TSX Composite Index remained negative 80.98 points to end the session at 12,979.58
The Canadian dollar slid 0.44 cents to 102.24 cents U.S.
Oil prices plunged below $92 U.S. a barrel after the International Energy Agency announced the release of 60 million barrels of oil from global strategic reserves in 28 countries because of the ongoing disruption of oil supplies from Libya. The IEA estimates that Libyan unrest removed 132 million barrels of light, sweet crude oil from the market by the end of May.
The prospect of lower fuel prices benefitted airline stocks, with Air Canada up eight cents to $2.26 while WestJet ran up 34 cents to $14.74.
Commodity prices were also slammed by the higher U.S. dollar.
A stronger greenback usually helps depress commodity prices, which are denominated in dollars, as it makes oil and metals more expensive for holders of other currencies.
The TSX energy sector fell as Suncor Energy dropped 25 cents to $37.28 and Canadian Natural Resources lost 36 cents to $38.79.
The July copper contract in New York lost five cents to $4.04 U.S. a pound but the base metals sector recaptured lost ground. Teck Resources, for example, picked up $1.42 to $45.60, though First Quantum was down $1.45 to $123.55.
Gold stocks also fell as Barrick Gold Corp. faded 54 cents to $43.03 and Goldcorp Inc. fell 61 cents to $47.53.
Financials were also a major weight with Royal Bank down 82 cents to $53.72, and TD Bank lost $1.15 to $78.57.
The TSX got some support from Research In Motion Ltd. after analyst Kevin Smithen at Macquarie Capital on Wednesday gave the BlackBerry maker an outperform rating. RIM shares were hammered over the last week after delivering a disappointing outlook, but rose today by $1.53 to $29.14.
Traders also looked ahead to next Tuesday when Greek legislators must approve a further euro-28-billion ($40.24 billion U.S) in budget cuts and new taxes and back a euro 50 billion privatization program in order for the euro-zone countries to hand over euro 12 billion ($17 billion U.S.) in bailout funds that Greece needs to avoid bankruptcy in mid-July.
In corporate news, Quebec gas company Gaz Metro has made a rival bid for Central Vermont Public Service Corp. topping Fortis Inc.’s $700-million U.S. friendly merger deal with the U.S. electrical power distributor. Gaz Metro is offering $35.25 U.S. a share, slightly higher than Fortis’s friendly merger deal valued at $35.10 U.S. announced in late May. Fortis shares declined 47 cents to $31.53.
The Maple Group on Wednesday boosted its hostile takeover offer for the Toronto Stock Exchange. Maple Group, a consortium of 13 Canadian pension funds, banks and financial services companies, will pay $50 per share for the TMX Group, up from $48 per share it had previously offered.
Maple boosted its offer hours after the TMX Group Inc. announced it will pay a special cash dividend of $4 per share when it closes its proposed friendly merger with the London Stock Exchange Group. TMX shares rose $1.04 to $45.29.
ON BAYSTREET
The TSX Venture Exchange stumbled 21 points to 1,914.88 while the Nasdaq Canada index regained 6.84 points to 546.02
In Toronto, nine of the 14 subgroups were lower on the day, weighed mostly by financials, down 1.1%, energy and gold stocks, down 1% each.
The five groups gaining traction were powered by information technology, ahead 1.1%, metals and mining, advancing 0.6%, and global base metals, up 0.4%.
ON WALLSTREET
In New York, stocks reeled Thursday, but gained some self-respect back, even as fears about the economy continued to run high.
The Dow Jones Industrial Average slumped 59.67 points to 12,050, with 27 out of the 30 blue chip components in the red. Earlier in the session, the Dow was down as much as 234 points.
Oil stocks Chevron and Exxon Mobil led the declines, with Pfizer, Home Depot and Intel the only Dow stocks to show modest gains.
The S&P 500 fell 3.64 points to 1,283.50. The Nasdaq Composite was up 17.56 points at 2,686.75.
Energy stocks were the hardest hit in the broader market, with shares of Marathon Oil, Petrobras and Hess falling about 3%.
The Federal Reserve's dim economic outlook put investors in a funk from the get-go Thursday morning. As if that wasn't enough, a weak initial claims report only exacerbated those jitters.
Adding further fuel to the dour day, an announcement that the government plans to tap into the Strategic Petroleum Reserve pummeled oil prices and the entire energy sector. The International Energy Agency said its 28 members would release 60 million barrels of oil, half of which will come from the SPR.
Shares of Red Hat added 3.7%, after the open source/cloud computing company reported better-than-expected first-quarter results and hiked its full-year forecast late Wednesday.
Pfizer and Bristol Myers Squibb released positive results from trials of its blood thinner, Eliquis, late Wednesday. Shares of Pfizer rose 1.4%, while shares of Bristol Myers Squibb climbed 5.6%.
Homebuilder Lennar released earnings results before the opening bell Thursday, posting a 65% drop in quarterly profit. But because that was better than investors had expected, shares rose 1.8%.
Software maker Oracle will report earnings after the market close Thursday. Analysts expect Oracle to have earned 71 cents U.S. a share. Earnings from H&R Block will also be released.
On the economic front, a report on initial claims also brought disappointing news, showing 429,000 Americans filed for their first week of unemployment benefits last week. That marked an increase of 9,000 new claims over the week before, and was far weaker than the 413,000 claims economists had expected.
Initial claims have now stayed above the 400,000 mark for 11 straight weeks, marking continued weakness in the job market.
Moreover, a report from the Census Department showed sales of new homes fell 2.1% in May, after rising for two months in a row, as the housing market continues to struggle.
The price on the benchmark 10-year U.S. Treasury shot up sharply, lowering the yield to 2.91% from Wednesday’s 2.99%. Treasury prices and yields move in opposite directions.
Oil prices jettisoned $3.77 to $91.64 U.S. a barrel
Gold futures for August delivery fell $35, or more than 2%, to $1,518.60 U.S. an ounce. And silver prices sank 4.8% to $35 U.S. an ounce. Copper prices slid 1.3% and natural gas prices dropped nearly 3%.
Related Stories
