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Stocks slide as oil spills(Baystreet Stock Market Update (Canada) Via Acquire Media NewsEdge) Loonie down The Toronto stock market was firmly negative mid-morning Friday as oil prices retreated and investors took in mixed earnings reports from Canada and the United States As noon approached, the S&P/TSX Composite index had slid 111.39 points to 11,421.98. The Canadian dollar was down a day after Bank of Canada governor Mark Carney said the sharply higher currency is putting a brake on the country's economy recovery. And he made it clear that "intervention is always an option" to control the rise of the loonie, which came within about 2.5 cents of regaining parity with the U.S. dollar a week ago. The TSX energy sector slipped as the December crude contract on the New York Mercantile Exchange fell. Crude prices had shot up more than 3% earlier this week to a one-year high on optimism that an economic recovery is taking root. EnCana Corp. lost 67 cents to $64.20. The base metals group was ahead as the December copper contract in New York rose four cents to $3.03 U.S. a pound. Teck Resources gained 46 cents to $35.57. TSX weakness was led by the tech sector, as shares in electronics manufacturer Celestica Inc. declined 49 cents to $9.16 as the firm generated a small third-quarter loss, reversing a year-earlier profit, as revenues took a hit from the recession and the company booked higher restructuring costs from earlier job cuts. Other earnings reports included an advance warning from fertilizer company Agrium Inc. which said it expects third-quarter earnings will be 90 to 95% below what they were a year ago when the full report is issued on Nov. 4. Agrium attributes the decline to lower prices and margins for all three categories of fertilizer that it produces. Its shares fell $2.23 to $57.50. Shaw Communications Inc. shares fell 37 cents to $20.22 as it said net income was $124 million or 29 cents a share for the three months ended Aug. 31, down 6.3% from $132.3 million or 31 cents a year earlier. Annual net income was $535.2 million, down 20.3% from $671.6 million in fiscal 2008. The Canadian dollar dropped 0.36 cents to 95.08 cents U.S. ON BAYSTREET All but three of the 14 TSX subgroups were lower. Information technology lost 2.1% of its strength, followed by energy, off 1.6%, and industrials, down 1.2%. The three gainers were metals and mining, up 0.8%, gold, ahead 0.5%, while global base metals advanced 0.5%. The TSX Venture Exchange nipped up 0.42 points to 1,334.61, while the Nasdaq Canada index fell back 10.66 points to 703.77. ON WALLSTREET In New York, stocks on Friday turned solidly lower, with profit-taking and declining oil prices leading energy shares lower, offsetting cheer that came after Microsoft Corp. reported results topping expectations. The Dow Jones Industrials jettisoned 76.33 points to 10,004.98. The S&P 500 index stepped back 9.55 points to 1,083.36. The Nasdaq composite index stumbled 1.33 points to 2,163.96. Stocks rallied Thursday following upbeat earnings from 3M, AT&T and other big blue chips. The advance propelled the Dow back above 10,000 and the S&P 500 closer to 1,100. But that advance proved unsustainable Friday, even though the corporate news was upbeat. A strong U.S. dollar - bouncing back from one-year lows against a slew of other currencies - added to the downturn Friday. A strong dollar pressures dollar-traded commodities including oil, which in turn drags on energy shares. Big multi-nationals that benefit from a weak dollar also slipped. Since bottoming at a 12-year low on March 9, the S&P 500 has rallied over 60%. Although repeated calls for a big 10% to 15% selloff haven't materialized, smaller selloffs of 1% to 3% have popped up periodically during the last 7 months. Friday appeared to be an extension of that trend. Microsoft reported weaker quarterly sales and income Friday morning that easily surpassed analysts' estimates. Cost cutting and strong sales of its Windows operating system fueled the advance. On Thursday, Microsoft rolled out its new Windows 7 operating system, expected to boost PC sales in the coming months. Shares of Microsoft, a Dow component, rose over 9% Friday morning, touching a one-year high, before giving up some of that advance. Late Thursday, Dow component American Express reported weaker quarterly sales and earnings that beat analysts' forecasts. Shares fell 2% Friday. Also late Thursday, Amazon.com reported a big surge in earnings and revenue, thanks in part to strong sales of its e-reader, Kindle. Shares jumped 24% Friday, hitting a 10-year high. So far, 199 companies, or 40% of the S&P 500, have reported results. Profits are currently on track to have fallen 18.2% versus a year earlier, according to the latest from Thomson Reuters. Revenue is expected to have dropped over 10% from a year ago. The Federal Reserve Chairman, speaking Friday, said that the financial turmoil is abating, but that lawmakers have to reform the system to help prevent a crisis of this magnitude happening again. On Thursday, the Federal Reserve proposed a broad overhaul of pay policies at 28 of the largest U.S. banks. Also Thursday, White House "pay czar" Kenneth Feinberg called for the seven biggest recipients of federal bailout money to cut in half what they pay their top executives. On the economic front, existing home sales jumped to a 5.57-million unit annual rate in September, according to a National Association of Realtors report released Friday morning. Sales were expected to have risen to a 5.35-million unit annual rate from 5.1-million unit annual rate in August. Treasury prices fell, raising the yields for the benchmark 10-year note to 3.47% from Thursday's 3.42%. Prices and yields move in opposite directions. The price of a barrel of oil lost 77 cents to $80.40 U.S. Gold prices slid two dollars to $1,057 U.S. an ounce. © 1998 - 2009 Baystreet.ca Media Corp. All rights reserved. |