Canadian stocks were extending losses for a second session Thursday morning amid falling commodities and weak cues from the global equity markets after the U.S, Federal Reserve failed to announce any new monetary stimulus measures at its two-day meeting concluded yesterday. Further, weak manufacturing data out of China and Europe today weighed on traders sentiment.
The S&P/TSX Composite Index dived 158.56 points or 1.35 percent to 11,600.78, a day after snapping its three session losing streak.
The price of crude oil was moving lower Thursday morning as traders were concerned over demand growth after the U.S. Federal Reserve disappointed markets by failing to announce new monetary stimulus measures. Meanwhile, China's factory output shrank for an eighth straight month in June, that indicated the country's economic trough may extend well into the third quarter. Crude for August was down $1.77 to $79.68 a barrel
In the oil patch, Niko Resources (NKO.TO) dived over 36 percent after reporting a reduction to its reserves. Encana Corp. (ECA.TO) was down over 7 percent. Baytex Energy Corp. (BTE.TO) was down 4 percent, while Suncor Energy (SU.TO) was losing 3 percent.
Oil and gas company Imperial Oil Ltd. (IMO.TO) received final acceptance from the Toronto Stock Exchange for a new normal course issuer bid to continue its existing share repurchase program facility that will expire on June 24, 2012. The new program enables the company to repurchase up to five percent of its 847.6 million outstanding common shares as of June 15, 2012, or a maximum of 42.38 million shares during the next 12 months. The stock lost over 2 percent.
Natural gas transportation company TransCanada Corp. (TRP.TO) slipped nearly 1 percent after announcing that it does not endorse an unsolicited mini-tender offer by TRC Capital Corp. to buy up to 2.0 million shares of TransCanada at a price of C$40.50 per share.
Gold stocks were extending losses amid a fall in bullion prices, with the Global Gold Index shedding over 2 percent. The price of gold was extending losses for a fourth straight session Thursday morning as the U.S. dollar was trading firm after the FOMC yesterday failed to announce the much awaited monetary stimulus measures to support the sagging economy. Gold for August lost $32.10 to $1,583.70 an ounce.
Among gold plays, Detour Gold (DGC.TO) lost 4 percent. Goldcorp. (G.TO) and Barrick Gold (ABX.TO) surrendered around 2 percent each.
Bombardier Aerospace, a division of Bombardier Inc. (BBD_A.TO, BBD_B.TO), announced that a wholly owned subsidiary of Nordic Aviation Capital A/S of Billund, Denmark has signed a firm purchase agreement for twelve CRJ1000 NextGen aircraft. Shares of Bombardier were down 1.50 percent.
In economics news, Statistics Canada said retail sales declined 0.5 percent to $38.9 billion in April, reversing gains in March. Sales at motor vehicle and parts dealers fell 1.2 percent in April, more than offsetting the rise in March, it added.
From the U.S., the Labor Department estimated that for the week ended June 16, new unemployment claims came in at a seasonally adjusted level of 387,000, a decrease of 2,000 from the previous week's revised level of 389,000. The decrease comes in part because revised figures put the previous week's level of new unemployment claims up from the 386,000 initially reported. As a result, the current level of 387,000 is higher than the 383,000 predicted by most economists.
Separately, the National Association of Realtors said existing home sales fell by 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. Economists had expected a slightly more modest decrease to an annual rate of 4.57 million.
Meanwhile, the euro zone suffered another steep fall in private sector activity in June, which was the steepest in three years, as the fallout from the debt crisis engulfing the single-currency bloc continued to hit production and new orders. The Composite Output Index, which measures the performance of both manufacturing and service sectors, remained unchanged at 46, the lowest reading since June 2009, a survey by Markit Economics revealed. Economists had expected a decline to 45.5.
Meanwhile, U.K. retail sales recovered at a faster than expected pace in May after easing in April, the Office for National Statistics said. Retail sales volume, including automotive fuel, rose 1.4 percent from the prior month, when it was down 2.4 percent. The increase was bigger than the expected growth of 1.2 percent.
by RTT Staff Writer
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