Canadian stocks continued to trade lower as a discouraging revenue forecast by Research in Motion has dragged the tech sector lower. The market was on target for a third straight negative close.
Soon before Friday’s bell, the S&P TSX Composite index was down 71.88 points, to 11,213.88, a drop of about 230 points on the week.
Research in Motion closed lower by $14.96, or 16.6%, to $75.20, after the company said it expects third-quarter revenue in the range of $3.60-$3.85 billion, compared to the $3.92 billion expected by analysts.
The Blackberry maker reported second quarter net income of $475.6 million or $0.83 per share, compared to $495.5 million or $0.86 per share a year ago.
Following the report, Research in Motion was downgraded to "sell" from "hold" at Keefe Bruyette and had its target price cut to $84 from $88 at UBS.
Onex was up 2.5% to $24.80 after the stock had its target price raised to $33 from $32 at UBS, which reiterated the shares at "buy".
On the upside, health-care stocks have jumped. Biovail rallied 6.9% to $16.16 after the stock was initiated at "overweight" at JP Morgan.
YM BioSciences was down 7.5% to $1.60 after the company reported that its fourth-quarter net loss was $3.3 million or $0.06 per share, compared to a loss of $3.0 million or $0.05 per share in the same quarter last year.
Western Canadian Coal Corp. dropped 6.2% to $2.88 after the company said that it has entered into an agreement to sell AGD Mining Pty Ltd. to Mandalay Resources Corp. The latter company saw its stock leap 10.5% to 42 cents.
Compton Petroleum Corp. rallied 9.2% to $1.30 after the company said there is a delay in the closing of its previously announced public offering of units of Compton, pending the underwriters receiving the customary "no-objection" letter from the United States Financial Industry Regulatory Authority, Inc.
The Canadian dollar was down 0.16 cents to 91.60 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, eight were lower. Information technology issues sank 5.5%, materials were off 0.9% and gold lost 0.8% of its strength.
The six gainers were health-care stocks, up 2.3%, metals and mining, advancing 0.8% and consumer staples, gaining 0.6%.
The TSX Venture Exchange moved up 2.77 points to 1,259.13, while the Nasdaq Canada index tanked 106.43 points, or 13%, to 714.24.
ON WALLSTREET
In New York, stocks fell for the third straight session Friday, ending lower for the week, after weaker-than-expected reports on durable goods orders and new home sales sparked concerns about the strength of any recovery.
The Dow Jones Industrials fell back 42.25 points from Thursday’s close to 9,665.19, a fall of about 160 points over the last five trading days. The S&P 500 index dropped off 6.40 points, to 1,044.38. The Nasdaq composite index was down 16.69 points to 2,090.92.
Stocks slid in the previous two sessions after the major indexes ended Tuesday at one-year highs. Investors reacted negatively to Wednesday's Federal Reserve meeting and Thursday's weaker existing home sales report and oil slump.
The mix of economic news Friday gave investors another reason to retreat after the recent advance. An attempt at stabilizing in the last hour of trading gave out near the close.
Stocks have seen a huge spike over the last 6-1/2 months. Since bottoming at a 12-year low March 9, the S&P 500 has gained 56.8% and the Dow has gained 48.9%, as of Thursday's close. After hitting a six-year low, the Nasdaq has gained 68%.
After the close Thursday, Hewlett-Packard issued a fiscal 2010 revenue forecast that is short of analysts' predictions and an earnings outlook in a range that could top analysts' expectations.
On a broader level, the computer and printer maker said that the IT industry will return to growth next year and that the company will outpace the rest of the market. Shares were little changed.
In deal news, Unilever is buying Sara Lee's personal care unit for $1.88 billion U.S., the companies said Friday.
A number of retailers declined on concerns about the economy, including Wal-Mart Stores.
Economically speaking, new home sales rose to a 429,000-unit annual rate in August, up from a 426,000 unit rate in July. That was shy of the 440,000-unit annualized rate economists were expecting, according to a survey by Briefing.com.
An earlier report showed that consumer sentiment rose more than expected in September. The University of Michigan's index rose to 73.5 from an initial reading of 70.2. Economists thought it would rise to 70.5.
Elsewhere, a Commerce Department report on durable goods showed orders slipped 2.4% in August after a 4.8% increase in July. Analysts surveyed by Briefing.com expected orders to have risen 0.4%. Excluding auto sales, goods orders showed a negligible decline.
Economists forecast a 1% rise in goods orders excluding autos, compared to a 1.1% rise on that basis in the prior month. July's overall durable goods gain was mostly on Cash-for-Clunkers-backed auto sales.
The Group of 20 leading developed and emerging countries met for a second day in Pittsburgh. The Group has been meeting to discuss the financial crisis and how to prevent something like it from happening again.
On Thursday, the leaders agreed to make the group the new permanent council for international economic cooperation, essentially eclipsing the G-8, which doesn't include developing nations such as China, India or Brazil.
The G-8 will still meet on major security issues, but will be less influential.
Treasury prices went sharply higher, lowering the yield on the benchmark 10-year note to 3.31% from Thursday’s 3.37%.
The price of a barrel of oil was up 13 cents to $66.05 U.S.
Gold prices surrendered $7 to $992 U.S. an ounce.
