Canadian stocks declined for the first time in three days, led by energy producers, as U.S. jobless claims exceeded estimates and natural gas and oil prices plunged on concern the recession will hurt demand.
The S&P/TSX composite index fell 264.59 points, to 9,967.85, after sizable surges in the last two days. The figure provided almost as steep a drop as the index had gained earlier in the week.
EnCana Corp., the nation’s biggest natural-gas producer, dropped 5.6%, or $3.50 to $58.76.
Suncor Energy Inc., the world’s second-largest oil-sands producer, fell $1.39 or 3.8%, to $34.87, as crude slipped from a sixth-month high. Petro-Canada fell $1.73, or 3.9%, to $43.12.
Potash Corp. of Saskatchewan Inc., the world’s biggest producer of the fertilizer, fell 4.8%, or $6.22, to $124.02.
Gold producers such as Barrick Gold, surged 44 cents or 1.1% to $41.97. Information technology issues such as Research in Motion gave back $3.78, or 4.4% to $82.63.
Canadian National Railways gave back $1.67 or 3.5%, to end the day at $45.75.
Stocks in Europe, Asia and the U.S. also fell after the Federal Reserve projected a deeper U.S. recession and Standard & Poor’s Ratings cut the U.K.’s credit outlook.
Natural gas futures fell the most in almost two months after a government report showed that U.S. inventories last week increased more than analysts estimated. Canadian Natural Resources, the country’s second-largest gas producer, sank $3.59, or 5.6%, to $60.
On the economic front, Canadian wholesale sales fell in March for a sixth straight month led by building materials.
Sales fell 0.6% to $40.5 billion, the lowest level since October 2006, Statistics Canada said today in Ottawa. Economists expected a 0.8% decrease, the median of 14 responses in a Bloomberg survey.
Canada’s economy contracted at a 3.4% pace in the last quarter of 2008 and growth in the first quarter may shrink at a 7.3% rate, due in part to a slump in housing investment, the Bank of Canada said last month.
The Conference Board's index of leading economic indicators, which is designed to forecast economic activity in the next three to six months, is likely to rise in April after not increasing for nine straight months.
The Canadian dollar rebounded 0.20 cents, to 87.85 cents U.S.
ON BAYSTREET
All but one of the 13 TSX subgroups were in negative territory, weighed down most by energy stocks, which tumbled 4.1%, metals and mining, down 3.9% and financials, off 2.8%. The shiny yellow metal known as gold was the lone bright spot on the day, gaining 1.4%
The TSX Venture Exchange gained 4.21 points to 1,089.85 while the Nasdaq Canada Index dropped 22.36 points to 700.81.
ON WALLSTREET
The Dow Jones Industrials average slumped 129.91 points, though off its lows of the day, to end trading at 8,292.13
The S&P 500 index eased 15.14 points to 888.33, while the Nasdaq Composite Index tumbled 32.59 points, to 1,695.25.
U.S. stocks closed sharply lower Thursday, though off session lows, as investors fretted about the state of the global recovery following some mixed economic data and a key ratings downgrade.
The Labor Department reported that initial jobless claims declined by 12,000 in the week ending May 16, compared to the revised figures for the proceeding week.
The number of people filing for first-time jobless benefits totaled 631,000 last week, slightly more than expected.
Jobless claims were expected to decline to 625,000 in the week ended May 16, according to a consensus of economist opinion from Briefing.com.
Continuing claims from those who have filed for benefits hit 6.6 million, an all-time high.
Meanwhile, the U.S. Conference Board says its index of leading economic indicators, designed to forecast economic activity in the next three to six months, rose 1% last month. Economists had expected a 0.8% increase.
Standard & Poor's affirmed the United Kingdom's top-tier credit rating but lowered its outlook for the country to "negative" from "stable."
Auto finance firm GMAC is poised to receive a second bailout from the Treasury, according to the Detroit News. The newspaper said the company is due to receive $7.5 billion U.S. more in aid.
In one of the first Nasdaq initial public offerings of the year, OpenTable Inc., which operates a restaurant reservation system, raised $60 million U.S., one of deal's underwriters told Reuters. The company priced its shares at $20 U.S. each, which was higher than expected, and rose 59% to $31.89 U.S.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.36% from 3.19% Wednesday. Treasury prices and yields move in opposite directions.
Oil slipped from its six-month high, but still continued to trade above $60 U.S. a barrel. The price of oil dropped 99 cents to settle at $61.05 U.S. a barrel.
COMEX gold for June delivery rose $13.80 to settle at $951.20 U.S. an ounce.
