Canadian stocks ended lower for a second straight session on Thursday, led by a sell-off in gold stocks with commodity prices declining sharply after a report showed robust economic activity in the U.S. and as well on some disappointing corporate earnings reports.
Gold prices tumbled amid the Federal Reserve's observations on the economy and the better-than-expected U.S. gross domestic product data earlier today, triggering heavy selling in bullion miners.
Meanwhile, U.S. initial jobless claims data unexpectedly increased last week. The Federal Reserve had indicated yesterday that interest rate hikes may happen sooner than anticipated earlier if the economy continued to recover.
The Federal Reserve on Wednesday announced the end of its monthly asset buying program, QE3, on the conclusion of its two-day monetary policy meet. The Fed indicated interest rates may remain near record lows for a "considerable time," but added hikes may happen sooner than markets expect if the economic recovery continues to gather steam. The Fed now believes under-utilization of labor resources to be gradually diminishing.
The benchmark S&P/TSX Composite Index closed Thursday at 14,458.69, down 68.88 points or 0.47 percent. The index scaled a intraday high of 14,546.49 and a low of 14,412.96.
On Wednesday, the index ended down 96.68 points or 0.66 percent at 14,527.57, after after the U.S. Federal Reserve ended its quantitative easing program while appearing upbeat on the economy, a cue interest rate hike may come sooner than markets anticipate.
Gold futures dived to end sharply lower on some upbeat U.S. gross domestic product data that improved more than expected in the third quarter, and as well impacted by the Federal Reserve's move to end its asset buying program with indications of a possible interest rate hike ahead of market forecast.
The Global Gold Index plummeted 7.69 percent, with gold for December delivery plunging $26.30 or 2.2 percent to settle at $1,198.60 an ounce on the New York Mercantile Exchange Thursday.
Goldcorp Inc. (G.TO) plunged 13.34 percent after reporting a net loss of $44 million or $0.05 per share in the third quarter, compared to net earnings of $5 million or $0.01 per share in the third quarter of 2013.
Among other gold stocks, Barrick Gold Corp. (ABX.TO) shed 4.11 percent, Agnico Eagle Mines Limited (AEM.TO) plummeted 11.65 percent, Kinross Gold Corp. (K.TO) dived 7.41 percent, Yamana Gold Inc. (YRI.TO) tumbled 16.28 percent, Eldorado Gold Corp. (ELD.TO) dived 7.90 percent. IAMGOLD Corp. (IMG.TO) plunged 12.40 percent.
The Capped Materials Index tumbled 4.96 percent on a sell-off in gold stocks, although Potash Corp. of Saskatchewan Inc. (POT.TO) gained 0.59 percent.
Crude oil ended lower as the dollar strengthened after an upbeat third-quarter gross domestic product data from the U.S., even as official data showed oil production to have risen to nearly 9 million barrels a day, the most in over three decades.
A report from the U.S. Energy Information Administration on Wednesday showed U.S. crude oil inventories to have risen by 2.1 million barrels in the week ended October 24.
The Energy Index dropped 1.31 percent, with U.S. crude oil futures for December delivery plunging $1.08 or 1.3 percent to close at $81.12 a barrel on the Nymex Thursday.
Suncor Energy Inc. (SU.TO) is up 0.39 percent, after reporting third quarter net earnings of C$919 million or C$0.63 per share, down from C$1.694 billion or C$1.13 per share for the prior year quarter.
Among other energy stocks, Canadian Natural Resources Limited (CNQ.TO) slipped 1.14 percent, Encana Corp. (ECA.TO) dipped 0.73 percent, Talisman Energy Inc. (TLM.TO) dropped 1.41 percent, and Cenovus Energy Inc. (CVE.TO) fell 1.90 percent.
The Healthcare Index jumped 4.37 percent, with Catamaran Corp. (CCT.TO) moving surging 12.87 percent after reporting a third quarter profit of $82.0 million or $0.39 per share, up 12 percent from $72.9 million or $0.35 per share in the year ago quarter. Valeant Pharmaceuticals Inc. (VRX.TO) added 1.50 percent, while Extendicare Inc. (EXE.TO) dropped 0.50 percent.
The heavyweight Financial Index added 0.28 percent, as Toronto-Dominion Bank (TD.TO) gained 0.70 percent, Canadian Imperial Bank of Commerce (CM.TO) up 0.05 percent, Bank of Montreal (BMO.TO) fell 1.14 percent, and National Bank of Canada (NA.TO) dipped 0.57 percent.
Royal Bank of Canada (RY.TO) gained 0.61 percent, while Bank of Nova Scotia (BNS.TO) added 0.26 percent.
The Diversified Metals & Mining Index dived 3.65 percent, as First Quantum Minerals Ltd. (FM.TO) plunged 5.39 percent and Lundin Mining Corp. (LUN.TO) tumbled 5.49 percent. Teck Resources Limited (TCK.B.TO) shed 3.58 percent, having reported a third-quarter profit that declined sharply from a year ago yesterday.
The Capped Industrials Index added 0.37 percent, with Air Canada (AC.B.TO) up 2.35 percent, and Canadian Pacific Railway Limited (CP.TO) up 0.11 percent.
Bombardier Inc. (BBD.B.TO) shed 1.55 percent, after reporting third-quarter net income of US$74 million or three cents per share, down from $147 million or eight cents per share in the third quarter of 2013.
The Information Technology Index gathered 0.44 percent, with smartphone maker BlackBerry Limited (BB.TO) down 0.42 percent.
The Telecom Index added 0.32 percent with Rogers Communications Inc. (RCI.B.TO) down 0.40 percent, BCE Inc. (BCE.TO) up 0.91 percent, and TELUS Corp. (T.TO) up 0.05 percent.
The Consumer Staples Index gained 0.46 percent, as Metro Inc. (MRU.TO) added 0.72 percent, Alimentation Couche-Tard Inc. (ATD.B.TO) moved up 0.91 percent, and Cott Corp. (BCB.TO) dropping 3.00 percent.
Maple Leaf Foods Inc. (MFI.TO) shares dropped 2.73 percent, after reporting an adjusted loss per share of C$0.13 in the third quarter, compared to loss of $0.19 per share in the same period last year.
The Consumer Discretionary Index shed 0.21 percent with Magna International Inc. (MG.TO) slipping 1.52 percent.
Progressive Waste Solutions Ltd. (BIN.TO) jumped 7.11 percent after reporting earnings of $0.36 per share for the third quarter, beating expectations.
Thomson Reuters Corp. (TRI.TO) inched up 0.02 percent, after reporting third-quarter earnings of $231 million or $0.28 per share, down from $271 million or $0.33 per share in the same quarter last year.
In economic news from the U.S., data from the U.S. Labor Department showed initial jobless claims to have edged up to 287,000 in the week ended October 25th, an increase of 3,000 from the previous week's revised level of 284,000.
A report from the Commerce Department showed U.S. economic activity to have increased by more than expected 3.5 percent in the third quarter of 2014, compared to the 4.6 percent growth seen in the second quarter. Economists had expected GDP to climb by 3.0 percent.
Meanwhile, survey results from European Commission show eurozone economic confidence to have picked up in October from a 10-month low. The economic confidence index rose unexpectedly to 100.7 in October from 99.9 in the prior month. The score was expected to fall to 99.7.
Germany's unemployment declined unexpectedly in October, suggesting an improvement in the labor market conditions despite weak economic developments. The number of people out of work decreased by 22,000 to 2.887 million in October, data from the Federal Labor Agency revealed Thursday. Economists had forecast an increase of 4,000.
Germany's EU measure of inflation unexpectedly slowed in October after holding steady in the previous two months, preliminary estimates from Destatis showed Thursday. The harmonized index of consumer prices rose 0.7 percent annually following 0.8 percent increase in each of the previous three months. Economists had forecast a higher figure of 0.9 percent.
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