TSX down on energy, financial stocks
Energy and financial stocks led the way to a sharp loss on the Toronto stock market this afternoon as investors took in data showing further deterioration of the economy.
New York markets were higher as investors took in another slew of corporate earnings reports.
Toronto's S&P/TSX composite index fell 153.36 points to 14,112.98 as the market was also hit with drops in gold stocks.
Strong gains in the past week and a half have sent the TSX to within about 300 points of its record high close chalked up last July.
"That run in my opinion is getting tired, so I would not be surprised to see a minor – nothing major – consolidation in the market," said Joe Ismail, technical analyst at Maison Placement Canada.
"So my limited downside in the near term here, or the short term, is 13,500 (points)." Ismail said he then expects the TSX will take off in the second half with momentum still provided by oil stocks and, to a lesser extent, from the reviving financial sector.
The TSX Venture Exchange was off 35.61 points to 2,521.87.
The Canadian dollar fell 0.83 cent to 98.38 cents US, after going as low at 97.9 cents US, as Statistics Canada reported that retail sales fell 0.7 per cent in February to $35.5 billion.
Also pressuring the loonie was a rising greenback as the U.S. dollar revived from recent declines that took it to a record low against the euro.
New York's Dow Jones industrials moved up 24.91 points to 12,745.14.
The Nasdaq composite index rose 21.95 points to 2,398.89, supported by Apple Inc. ahead of earnings coming out after the market close. Its shares were up $2.74 to US$162.94.
The S&P 500 index added 1.08 points to 1,377.02 after Ambac Financial Group Inc. posted another steep quarterly loss as turmoil in the bond market pummelled many of the bond insurer's deals. Ambac, which covers bondholders if bond issuers default, lost US$1.66 billion, compared with profit of US$213.3 million in the first quarter of last year, and its shares plunged 29 per cent to US$4.29.
There was better news from Yahoo Inc., which reported stronger-than-expected profits and revenue. However, there was disappointment that the company affirmed its forecast, rather than boosting its predictions and its shares slipped 50 cents to US$28.04.
Boeing Co. earned US$1.2 billion in the first quarter, a 38 per cent increase from a year ago as its backlog of orders grew to a new record high. Boeing's earnings topped Wall Street estimates but its sales were below expectations. Its shares rose $3.76 to US$82.32.
The TSX energy sector fell 1.6 per cent even as oil prices held steady near Tuesday's latest record high close cash advance today. Prices had earlier retreated following the release of figures showing U.S. crude inventories rose by 2.4 million barrels last week.
The June crude contract on the New York Mercantile Exchange inched up nine cents to US$118.16 a barrel after going as low as US$116.45. Suncor Energy (TSX: SU) retreated $3.85 to $117.22 and EnCana Corp. (TSX: ECA) moved down $1.48 to $84.60.
Oil remains nearly double its price a year ago and up by almost one-quarter since the start of 2008.
Shares in major oil and gas producer Nexen Inc. (TSX: NXY) moved 72 cents higher to $36.70 after it said its shale gas find in the Horn River Basin of northeast British Columbia has "the potential to become one of the most significant shale gas plays in North America."
Precision Drilling Trust units (TSX: PD.UN) were $1.07 lower to $25.92 after Canada's biggest oil and gas driller reported a 33 per cent decline in first-quarter earnings to $106.3 million. Revenue fell 17 per cent to $342.7 million.
Husky Energy Inc. (TSX: HSE) shares dipped $1.31 to $45.40 after the oil and gas producer's CEO predicted another record year in 2008 and said Husky hopes to get bigger through acquisitions.
The TSX financial sector was down 0.7 per cent following the Ambac announcement as Royal Bank gave back 54 cents to $47.49 and CIBC (TSX: CM) lost 91 cents to $9.04.
But there were reassuring words from the outgoing chairman of Swiss bank UBS, which has written down US$37.4 billion since last summer because of the financial crisis spawned by the collapsing U.S. housing sector.
Marcel Ospel believes the worst is over for the U.S. subprime mortgage crisis, adding "we soon will be sailing into calmer waters."
Gold prices fell with the June bullion contract on the Nymex down $16.20 to US$909 an ounce. The Toronto gold sector declined 1.8 per cent and Kinross Gold Corp. (TSX: K) fell 1.03 to $21.63.
Lundin Mining Corp. (TSX: LUN) shares were down 14 cents to $7.63 after it disclosed that operating partner Freeport McMoRan Copper and Gold Co. has warned of spiralling costs at the Tenke copper-cobalt project under construction in the Democratic Republic of Congo. Lundin, which owns 24.75 per cent of Tenke, said the capital cost estimate has swollen from $1 billion last October to $1.9 billion now.
Garda World Security Corp. (TSX: GW) shares surged $1.62 or 12.7 per cent to $14.55 after it reported a 40 per cent increase in quarterly profit to $7.2 million on an acquisition-boosted 46 per cent rise in revenue to $293.5 million.
Filed under: online by Pascal