Canadian stocks ended lower on Wednesday, driven mostly by gold stocks after the U.S. Federal Reserve ended its quantitative easing program while appearing upbeat over the economy, a cue interest rate hike may come sooner than markets anticipate.
The U.S. Federal Reserve on Wednesday announced its final round of quantitative easing as expected, slashing purchases of Treasury and mortgage-backed securities to zero from $15 billion.
Policy makers repeated their pledge to keep interest rates around record lows for "a considerable time," but said interest rates may rise sooner than markets expect if the economic recovery continues to gather steam.
The Fed ended its QE3 program after U.S. unemployment rate dipped to 5.9 percent in September, a six-year low.
With a definite change in outlook that previously warned about persistent slack in the labor market, the Fed now believes under-utilization of labor resources to be gradually diminishing. Policy makers also sounded more hawkish on inflation despite a significant recent drop in prices of oil.
The main index was pulled lower by gold, healthcare, and financial with most major components ending in negative territory.
The benchmark S&P/TSX Composite Index closed Wednesday at 14,527.57, down 96.68 points or 0.66 percent. The index scaled a intraday high of 14,641.33 and a low of 14,471.60.
On Tuesday, the index closed as higher commodity prices lifted resource stocks, even as global equity markets made gains on some upbeat consumer confidence data from the U.S.
Crude oil ended higher with the dollar trending lower against some major currencies, having surrendered some of the early gains after the Fed policy statement with the official weekly inventories rising less than expected.
A report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen by 2.1 million barrels in the week ended October 24, which was below analysts expectation of an increase of 3.4 million barrels.
The Energy Index dropped 0.26 percent, with U.S. crude oil futures for December delivery gaining $0.78 or 1.0 percent to close at $82.20 a barrel on the Nymex Wednesday.
Among energy stocks, Suncor Energy Inc. (SU.TO) fell 0.38 percent, Canadian Natural Resources Limited (CNQ.TO) slipped 0.15 percent, Encana Corp. (ECA.TO) dipped 0.05 percent, Talisman Energy Inc. (TLM.TO) dropped 2.35 percent, and Cenovus Energy Inc. (CVE.TO) surrendered 0.32 percent.
The Healthcare Index shed 1.06 percent, with Extendicare Inc. (EXE.TO) dropped 0.98 percent, Catamaran Corp. (CCT.TO) down 1.24 percent, and Valeant Pharmaceuticals Inc (VRX.TO) slipped 0.96 percent.
Meanwhile, Cipher Pharmaceuticals Inc. (DND.TO) surged 8.88 percent after reporting net income of $8.7 million or $0.34 per basic share for the third quarter, compared with net income of $3.4 million or $0.14 per basic share a year ago.
Gold futures ended lower ahead of the outcome from the U.S. Federal Reserve's monetary policy meet, with the dollar trending lower and a positive global equity markets.
The Global Gold Index plummeted 4.23 percent, with gold for December delivery dropping $4.50 or 0.4 percent to settle at $1,224.90 an ounce on the New York Mercantile Exchange Wednesday.
Among gold stocks, Agnico Eagle Mines Limited (AEM.TO) dived 4.83 percent, Goldcorp Inc. (G.TO) surrendered 4.15 percent, Kinross Gold Corp. (K.TO) fell 3.26 percent, Yamana Gold Inc. (YRI.TO) dropped 4.15 percent, Eldorado Gold Corp. (ELD.TO) dived 5.05 percent, and Barrick Gold Corp. (ABX.TO) plunged 5.03 percent.
The Capped Materials Index dived 2.40 percent mostly on gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 1.05 percent.
The heavyweight Financial Index slipped 0.36 percent, as Toronto-Dominion Bank (TD.TO) shed 0.73 percent, Canadian Imperial Bank of Commerce (CM.TO) dropped 0.21 percent, Bank of Montreal (BMO.TO) surrendered 0.39 percent, and National Bank of Canada (NA.TO) dipped 0.08 percent.
Royal Bank of Canada (RY.TO) fell 0.43 percent, while Bank of Nova Scotia (BNS.TO) lost 0.67 percent.
The Diversified Metals & Mining Index shed 0.43 percent, as First Quantum Minerals Ltd. (FM.TO) dropped 2.49 percent and Lundin Mining Corp. (LUN.TO) gained 0.38 percent.
Teck Resources Limited (TCK.B.TO) gained 1.79 percent after reporting a third-quarter net profit of C$84 million or C$0.14 per share, down sharply from C$267 million or C$0.46 per share a year ago. Adjusted profit totaled C$159 million or C$0.28 per share for the recent quarter.
Sherritt International Inc. (S.TO) jumped 6.32 percent after indicating plans to cut its head office workforce by 25 percent as part of a cost-cutting options announced earlier. The company is also planning to sell its Toronto office building.
Cameco Corp. (CCO.TO) shed 3.32 percent after reporting adjusted earnings of C$93 million or C$0.23 per share for the third quarter, down from C$208 million or C$0.53 per share last year.
The Capped Industrials Index dropped 0.54 percent, with Bombardier Inc. (BBD.B.TO) down 0.77 percent, Air Canada (AC.B.TO) up 2.99 percent, and Canadian Pacific Railway Limited (CP.TO) down 0.29 percent.
Ballard Power Systems Inc. (BLD.TO) plummeted 7.76 percent after cutting its full-year revenue growth estimates to 20 percent, from an earlier forecast of 30 percent increase.
The Information Technology Index surrendered 0.62 percent, with smartphone maker BlackBerry Limited (BB.TO) down 1.34 percent.
The Telecom Index fell 0.47 percent with Rogers Communications Inc. (RCI.B.TO) down 1.07 percent, BCE Inc. (BCE.TO) down 0.02 percent, and TELUS Corp. (T.TO) down 0.32 percent.
The Consumer Staples Index dived 1.28 percent, as Metro Inc. (MRU.TO) shed 1.43 percent, Alimentation Couche-Tard Inc. (ATD.B.TO) dropped 1.11 percent, Loblaw Companies Limited (L.TO) lost 1.57 percent, Maple Leaf Foods Inc. (MFI.TO) dipped 0.05 percent, and Cott Corp. (BCB.TO) surrendered 3.72 percent.
The Consumer Discretionary Index inched up 0.01 percent with Magna International Inc. (MG.TO) slipping 0.32 percent.
In some other economic news, industrial production in Japan was up a seasonally adjusted 2.7 percent on month in September, the Ministry of Economy, Trade and Industry said Wednesday. That beat forecast for an increase of 2.2 percent following the 1.9 percent contraction in August.
On a yearly basis, industrial production in Japan added 0.6 percent - again beating forecast for a decline of 0.1 percent following the 3.3 percent drop in the previous month.
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