Stocks in Toronto opened sharply lower on Thursday, tracking global equity markets and extending its recent hefty losses, as expectations of a U.S. Federal Reserve rate hike in September softened and anxiety over global growth dominated.
The S&P/TSX composite index stumbled 116.70 points to open Thursday at 13,919.93
The Canadian dollar inched up 0.14 cents at 76.32 cents U.S.
Valeant Pharmaceuticals International said it would buy privately owned Sprout Pharmaceuticals, whose drug became the first approved treatment this week for low sexual desire in women, for about $1 billion plus milestone payments.
Valeant will pay $500 million in cash upfront and another installment next year for Sprout and its controversial pink pill, Addyi.
Valeant shares descended $6.27, or nearly 2%, to $313.95.
The Alberta Energy Regulator is investigating a leak on NuVista Energy’s pipeline in northern Alberta that spilled 100 cubic meters, roughly 629 barrels, of oil and water and natural gas emulsion, the regulator said on Wednesday.
The leak on the pipeline, 50 kilometers northeast of Rainbow Lake, was first identified by a helicopter crew during an aerial surveillance flight on Friday, and covered an area approximately 70 by 100 metres.
NuVista shares lost 18 cents, or 3.8%, to $4.59.
BMO initiated coverage of Lundin Gold with an outperform (speculative) rating and target price of $5.00, saying the miner’s flagship asset Fruta del Norte is one of the largest high-grade underground deposits yet to be developed in the world.
Lundin Gold shares were flat at $4.31.
Gaming Nation reports end-of-fiscal year earnings today, expecting earnings of two cents per share. Gaming Nation shares were unchanged at 99 cents.
On the economic front, Statistics Canada reported this morning that 531,700 people drew regular Employment Insurance benefits in June, up 5,200 or 1% from May.
The agency also told us that wholesale trade rose 1.3% to $55.3 billion in June, more than offsetting the decline in May, on the strength of gains in five of seven sub-sectors. In the second quarter of 2015, wholesale sales rose 2.1% compared with the first quarter.
ON BAYSTREET
The TSX Venture dropped 1.56 points to 556.61.
Nine of the 14 TSX subgroups were lower to begin the session, as industrials surrendering 1.8%, health-care off 1.5%, and consumer staples down 1.2%.
The four gainers were led by gold, up 4.4%, metals and mining stocks better by 2.1%, and materials, improving 1.9%. Energy stocks were unchanged in the first hour of trading.
ON WALLSTREET
U.S. stocks traded sharply lower on Thursday as investors weighed fresh lows in oil prices and continued uncertainty over the Fed amid data releases.
The Dow Jones industrial average dumped 162.61 points to 17,348.73, with Merck and Disney leading nearly all blue chips lower
The S&P 500 dropped 17.73 points to 2,061.88, into negative territory for the year, with information technology and financials the greatest decliners on the day. Energy is the greatest laggard for the year, down 17%.
The NASDAQ index fell 40.30 points to 5,019.05, with Apple off more than 1%.
In corporate news, Sears lost an adjusted 67 cents U.S. per share for its latest quarter, smaller than the loss of $2.50 U.S. estimated by the lone analyst providing an estimate. Profit margins improved at both the Sears and Kmart chains, but same-store sales declined.
Bernstein downgraded Disney to "market perform" from "outperform," saying valuations for media stocks need to be adjusted because of an increased risk premium regarding affiliate fees.
Hewlett Packard, Gap, Intuit, Marvell Tech, Ross Stores, Salesforce.com and Fresh Market are all due after the bell.
Traders will digest several pieces of economic data out Thursday that could shed further light on the Fed.
Initial claims data came in at 277,000, but remained consistent with an improving labour market trend that could support a rate hike this year.
The Philadelphia Fed index for August came in at 8.3, while leading indicators declined 0.2% in July. Existing home sales rose to an eight-year high.
Prices for 10-year U.S. Treasuries improved, lowering yields to 2.10% from Wednesday’s 2.12%. Treasury prices and yields move in opposite directions.
Oil prices gained 21 cents a barrel to $41.01 U.S.
Gold prices hiked $18.30 to $1,146.20 U.S. an ounce.
