A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014. (© Mark Blinch / Reuters)
Canada’s benchmark stock index fell slightly in morning trade on Thursday as shares of a major oil producer surged on a strong earnings report, helping offset weakness among gold miners.
Canadian Natural Resources Ltd, the country’s largest independent petroleum producer, jumped 4.3 per cent to $40.13 after reporting a quarterly profit that blew past analysts’ expectations.
The materials group, however, which includes precious and base metals miners and fertilizer companies, lost 1.8 per cent as gold and copper prices were pressured by a stronger U.S. dollar on growing expectations the U.S. central bank will raise interest rates this month.
Barrick Gold, the world’s largest gold producer, fell 4.4 per cent to $24.13, and gold royalty company Franco-Nevada Corp declined 3 per cent to $84.29.
At 11:24 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 10.39 points, or 0.07 per cent, to 15,589.29
Nine of the index’s 10 main groups were in positive territory, but decliners were outnumbering advancers by a 1.25-to-1 ratio.
Toronto-Dominion Bank, Canada’s second-largest lender, fell 1 per cent to $68.82 even as a strong performance in both the United States and Canada helped it close off bank earnings season with quarterly earnings modestly ahead of market expectations.
“As the last reporting bank, the surprise element of a strong quarter is missing,” said RBC Capital Markets analyst Darko Mihelic.
In the past week, some major Canadian banks have reported quarterly earnings that handily beat forecasts, including Bank of Montreal which on Tuesday posted a profit that smashed market expectations.
The financials group gained 0.2 per cent overall.
The energy group gained 0.5 per cent, even as oil prices fell after U.S. crude stocks hit an all-time high and official data showed Russia did not cut oil production in February.
First Capital Realty Inc declined 3.4 per cent to $20.33 after a shareholder said it would sell 9 million of the retail property developer’s shares.
The Canadian economy grew at a faster pace than expected in the final quarter of last year, lifted by consumer spending and a rebound in activity in the housing market, while imports tumbled, data from Statistics Canada showed.
U.S. stocks slipped on Thursday as investors booked profits after a record day on Wall Street that propelled the Dow Jones Industrial Average above 21,000 for the first time ever.
Wall Street’s main indexes on Wednesday posted their best day since the November election, boosted by President Donald Trump’s more measured tone in a speech to Congress and as bank stocks surged on increased chances of an interest rate hike this month.
“It seems like after yesterday’s surge, there is no real news out there this morning and it is almost like the market’s simply taking a breather,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, NC.
The next big theme for the market is the Federal Reserve’s policy-setting meeting on March 14-15. A large number of Fed officials this week have stoked the possibility of an interest rate hike as the economy strengthens.
Fed Chair Janet Yellen is set to speak on Friday, and could provide the strongest indication on a move in the coming weeks.
Traders have currently priced in a 74-per-cent chance of a rate hike this month, up from roughly 30 per cent at the start of the week, according to Thomson Reuters data.
The Dow Jones Industrial Average was down 34.87 points, or 0.17 per cent, at 21,080.68, the S&P 500 was down 8.58 points, or 0.35 per cent, at 2,387.38 and the Nasdaq Composite was down 23.71 points, or 0.4 per cent, at 5,880.32.
Oil prices fell more than 1.4 per cent following a report that showed U.S. crude oil stocks hit an all-time high.
Ten of the 11 major S&P indexes were lower. The financial index, which outperformed on Wednesday and in the broader post-election rally, slipped 0.83 percent on Thursday.
“The losses are much smaller than the gains yesterday, so it seems like some modest profit taking here as we gear up for the upcoming news,” Detrick said.
Shares of Snap Inc, the parent company of messaging app Snapchat, were up 45.7 per cent at $24.76. The stock debuted at $24 after its IPO was priced at $17.
Kroger slipped 2.9 per cent after the supermarket operator reported a surprise decline in holiday-quarter same-store sales.
Monster Beverage was the biggest percentage gainer on the S&P, rising 13.7 per cent following a quarterly revenue that beat analysts’ average estimate.