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TSX slides on eurozone worries, falling oil prices

Toronto's main market was lower Monday, amid lower commodity prices and as investors once again turned their attention to the eurozone.
TSX slides on eurozone worries, falling oil prices

Toronto's main market was lower Monday, amid lower commodity prices and as investors once again turned their attention to the eurozone.

Traders also took in factory orders data out of the U.S., which said that orders rose 1.8%, lower than the 2.3% increase economists had expected. Meanwhile, November factory orders were revised down to show a 0.3% decline.

In Europe, bond yields in Spain rose after Prime Minister Mariano Rajoy denied allegations over the weekend that he and some members of his political party had accepted secret payouts. 

In Italy, an election later this month is worrying investors as concerns are mounting that the next government could scale back on the economic reforms implemented by Prime Minister Mario Monti. 

Back in Toronto, as of about 1 p.m. EDT, the S&P/TSX Composite was lower by 54.89 points, or 0.43%, to 12,713.94, while the more junior S&P/TSX Venture Composite fell 9.1 points, or 0.74% to 1,219.56.

Gold futures for April delivery ticked higher Monday, on the yellow metal's safe-haven appeal, lately ahead by $5.50 to $1,676.10 an ounce.

Meanwhile, crude futures dropped Monday, with crude for March delivery lately falling $1.46 to $96.31 a barrel.

Elsewhere, silver futures declined 12 cents to $31.83 an ounce, while the base metal copper contract shed 1 cent to $3.77 a pound.

Gold giants were mixed Monday, with Kinross (TSE:K) down 0.48%, while Barrick Gold (TSE:ABX) added 1.15%, and Goldcorp (TSE:G) increased 1.69%.

Toronto's main sectors were mostly lower, except for info tech and materials.

Materials edged up, helped by advances in Kirkland Lake Gold (TSE:KGI) (LON:KGI)  - up nearly 6% after it said Monday that with the completion of its service cage project at its Macassa gold mine in Ontario, it will this month begin the ramp up to its “second milestone” production rate to as high as 1,600 tons per day (tpd).

Elsewhere in the sector, Banro (TSE:BAA) and Premier Gold Mines (TSE:PG) added 3.44% and 3.40%, respectively.

Declines were seen in Centerra Gold (TSE:CG) – down 3.07%, while Turquoise Hill Resources (TSE:TRQ) fell 2.48% on reports that Mongolia’s president said his country should have more control of the Oyu Tolgoi copper and gold project. 

Rio Tinto (NYSE:RIO) (LON:RIO) has a 66% stake in Oyu Tolgoi through its 51% interest in Turquoise Hill, while Mongolia has a 34% stake in the project.

Also in metals and mining news, Ivanplats (TSE:IVP) has appointed Steve Garcia, the former executive vice president of Ivanhoe Mines, to lead its mine building team in Africa, after its chairman Robert Friedland told an audience over the weekend that the company is considering a $1 billion secondary listing in London within the next three to four months. 

Ivanplats raised around C$300 million on the Toronto Stock Exchange last year.

Energy was off Monday, with declines seen in PetroBank Energy and Resources (TSE:PBG), Advantage Oil & Gas (TSE:AAV) and Birchcliff Energy (TSE:BIR) – down 3.33%, 2.40% and 2.03%, respectively.

Advances were seen in Petrominerales (TSE:PMG), Pacific Rubiales Energy (TSE:PRE) and oilfield services company Mullen Group (TSE:MTL) – up 2.23%, 1.81% and 1.47%, respectively.

Financials were lower Monday, with the Royal Bank of Canada (TSE:RY) down 0.93% and Manulife Financial (TSE:MFC) declining 0.76%, while Sun Life Financial (TSE:SLF) was lately flat.

In Canadian corporate news, Canadian Pacific (TSE:CP) (NYSE:CP) on Monday added another former Canadian National Railway Co. (TSE:CNR)(NYSE:CNI) executive to its ranks with the appointment of Keith Creel as its new president and COO.

Shares of Blackberry (TSE:BBY) (NASDAQ:BBRY) rose over 12% Monday, as the handset maker was bolstered by a Bernstein Research upgrade, helping the tech sector in Canada. 

Analyst Pierre Ferragu raised his rating to outperform from market perform, saying: “We have grown more confident in the likely success of the BlackBerry 10 launch, supported by low channel inventories, strong operator support and material pent-up demand.”


U.S. stocks fell back from five-year highs as factory order data failed to impress traders and amid renewed concern over the eurozone’s ongoing troubles.

The Dow was lately down 116.44 points to 13,893.55, the Nasdaq fell 37.71 points to 3,141.39, and the S&P 500 moved down 13.69 points to 1,499.48.

Earnings season in the U.S. is winding down, with around half of the firms in the S&P 500 having reported so far. Another 90 S&P 500 firms will report this week, according to Deutsche Bank, accounting for 12% of the index’s market capitalization. 

Monday, Humana (NYSE:HUM) reported a fourth quarter profit that topped Street views, but revenue of $9.56 billion came in below projections for sales of $9.75 billion. Its shares lately rose 4.7%.

Gannett Co. (NYSE:GCI) Monday said its fourth quarter profit fell 12%, but adjusted earnings topped analyst views on a “strong performance” in its broadcasting segment and as digital revenue across the company rose nearly 30 per cent. Its shares slid more than 5% on Monday. 

After the bell, earnings are due in from Anadarko Petroleum (NYSE:APC) and fast-food restaurant operator Yum Brands (NYSE:YUM).

Highlights later this week include quarterly report cards from Walt Disney (NYSE:DIS) and Visa (NYSE:V), among others. 

In other corporate news, Dell (NASDAQ:DELL) shares fell more than 3% after climbing on Friday following a Reuters report that the company was close to signing a potential buyout deal, with an announcement expected to come as early as today. The Wall Street Journal reported that investors would be offered a price of around $13 to $14 a share. 

Elsewhere, the New York Post reported that Herbalife (NYSE:HLF) is now under investigation by the Federal Trade Commission, after the company was accused of running a pyramid scheme by Pershing Square hedge fund manager Bill Ackman. The report said the FTC has received 192 complaints against the firm in the last seven years. Shares of the company dropped almost 4% this afternoon.

Tiffany & Co. (NYSE:TIF)  shares slid 3.7% after the jewelry company was downgraded to a neutral rating from buy by Monness Crespi Hardt on Monday.

On a similar note, Wal-Mart (NYSE:WMT)  shed over 1% after J.P. Morgan Chase & Co. downgraded the retailer to neutral from overweight, and Merck (NYSE:MRK) fell after it was taken down to a market perform rating from outperform by Leerink Swann. 

On the M&A front, Oracle Corp. (NASDAQ:ORCL)  said it will buy Acme Packet Inc. (NASDAQ:APKT) in a deal with an enterprise value of $1.7 billion.

European markets finished sharply lower today with shares in France leading the region. The CAC 40 was down 3.01% while Germany's DAX was off 2.49% and Britain's FTSE 100 was lower by 1.58%.

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October 16 2015

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