In the News

Bloomberg Businessweek: May 4, 2012

Friday, May 4, 2012

Canadian Stocks Fall on U.S. Jobs Numbers, Oil Decline

By Joseph Ciolli on May 04, 2012

Canadian stocks fell, completing their biggest weekly decline this year, after U.S. employers added fewer jobs than forecast and energy shares declined with oil prices.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, dropped 3.5 percent. Canadian Natural Resources Ltd. (CNQ), the country’s third-biggest energy company, sank 3.7 percent after its profit trailed estimates. Royal Bank of Canada, the nation’s biggest lender, decreased 1.6 percent. Goldcorp Inc. (G), the world’s second-biggest producer of the metal, rose 1.3 percent as gold gained on speculation the Federal Reserve will add to stimulus measures to boost growth.

The Standard & Poor’s/TSX Composite Index (SPTSX) decreased 143.67 points, or 1.2 percent, to 11,871.23 in Toronto. The index fell 3 percent over five days, its worst week since Dec. 16, and erased its gain for the year.

“The U.S. payroll numbers were a lot weaker than expected,” Anil Tahiliani, a money manager at McLean & Partners in Calgary, said in a telephone interview. The firm oversees about C$1 billion ($1 billion). “Uncertainty has come back on the table in terms of headline risk. The market has been looking for an excuse in the last day or two to take it lower.”

Canadian stocks retreated after two straight weekly gains as Spain entered a recession, a U.S. industry report showed employers added fewer jobs than forecast last month and commodity prices dropped. Energy and mining shares account for 44 percent of Canadian stocks by market value, compared with 20 percent in the U.S.
Missing Forecasts

U.S. payrolls climbed 115,000 in April, the smallest gain in six months, the Labor Department reported today. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance. The jobless rate fell to a three-year low of 8.1 percent.

Royal Bank of Canada (RY) decreased 1.6 percent to C$54.95. Toronto-Dominion Bank (TD), Canada’s second-largest lender, fell 0.7 percent to C$81.16. Bank of Nova Scotia (BNS), the country’s third- largest lender, dropped 1 percent to C$52.75.

Great-West Lifeco Inc., Canada’s second-biggest insurance company, fell 8.8 percent to C$22.19 after its first-quarter results fell short of analysts’ estimates and Bank of Montreal lowered its rating on the shares.

Energy stocks in the S&P/TSX declined as oil fell below $100 a barrel for the first time since February after the U.S. jobs report fanned concern that the economy of the world’s largest crude-consuming country may be losing speed.

Suncor Energy dropped 3.5 percent to C$30.17. Canadian Natural Resources sank 3.7 percent to C$31.71 after reporting first quarter adjusted profit that missed the average analyst estimate by 35 percent. Oil-sands producer Cenovus Energy Inc. (CVE) declined 5.3 percent to C$32.15.
Commodities Slump

Materials companies fell as declining prices for copper and wheat outweighed an increase in gold.

Teck Resources Ltd. (TCK/B), the country’s biggest base metals producer, dropped 1.6 percent to C$34.79. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, slipped 4.3 percent to C$18.82. Potash Corp. of Saskatchewan Inc., the biggest fertilizer company, fell 0.8 percent to C$42.32.

Gold gained for the first time this week after U.S. jobs figures increased the metal’s appeal as a hedge in the event of additional stimulus measures.

Goldcorp rose 1.3 percent to C$36.43. Barrick Gold Corp. (ABX), the world’s largest producer of the metal, gained 0.4 percent to C$37.66.

To contact the reporter on this story: Joseph Ciolli in New York at [email protected]

To contact the editor responsible for this story: Nick Baker at [email protected]



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