TORONTO (CP) — The Toronto stock market finished its last trading day of the month with a major loss amid a widespread decline in the gold and financial sectors and a further plunge in the stock price of trouble-plagued Valeant Pharmaceuticals International.
The S&P/TSX composite index was down 262.71 points at 13,529.17 — its second triple-digit drop this week and fourth negative showing in the last five sessions.
Meanwhile, the loonie rose 0.53 of a U.S. cent to 76.48 cents U.S.
In New York, the Dow Jones industrial average lost 92.26 points to 17,663.54, while the S&P 500 gave back 10.05 points to 2,079.36 and the Nasdaq shed 20.52 points to 5,053.75.
Norman Raschkowan, senior partner at Sage Road Advisors, said earnings reports from Canadian energy companies this week have been poor, highlighting the struggles ahead for the resource-heavy TSX.
“It reaffirms the broad narrative about just how difficult things are for commodity companies, and Canada is still very heavily commodity oriented,” Raschkowan said.
“But also, there is a growing concern that the challenges are going to persist for some time,” he added, noting that Husky Energy, which reported its results on Thursday, is using a US$40 benchmark oil price for planning purposes.
“If you had spoken to people during the summer, the majority probably would have expected that commodity prices would start turning up by the middle of next year. I think if you were to take a poll today you would find that would be the minority view, and that most people are expecting the challenges are going to persist for the majority of next year.”
Valeant (TXS:VRX), Canada’s largest drug company, continued its slide amid ongoing questions about its business and accounting practices, falling $26.19, or nearly 18 per cent, to $122.04.
In economic news, Statistics Canada reported that Canada’s gross domestic product rose 0.1 per cent in August — the third straight monthly increase and in line with economists’ consensus expectations.
South of the border, the U.S. Commerce Department said consumer spending inched up just 0.1 per cent in September — the smallest gain in eight months — partly because consumers were spending less on gasoline as energy prices fell.
On commodity markets, the December benchmark crude oil contract was up 53 cents at US$46.59 a barrel, while December natural gas advanced six cents to US$2.32 per mmBtu. December gold was down $5.90 at US$1,141.40 an ounce.
Raschkowan says that despite the recent losses on the TSX, November and December are typically good months on the stock markets, as investors look to the coming year with optimism.
“Hopefully it sets us up for a strong Christmas rally,” Raschkowan said. “I think that’s what everyone is hoping for; that we’re giving this all up now just so we can have a lower base from which to launch our year-end rally.”
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Alexandra Posadzki, The Canadian Press
