Fi­nan­cials, en­ergy drag down the Toronto stock in­dex

Cape Breton Post - - Classifieds/ Business -

A plethora of neg­a­tive cor­po­rate and earn­ings news weighed on the Toronto stock in­dex Thurs­day, with banks and en­ergy com­pa­nies mak­ing up the big­gest por­tion of the re­treat.

The S&P/TSX com­pos­ite in­dex gave up 82.66 points to 15,550.55, as the ma­jor­ity of sec­tors fin­ished the day in the red.

Moody’s In­vestors Ser­vice down­graded Canada’s six big banks over con­cerns about bal­loon­ing con­sumer debt and in­flated hous­ing prices.

The move re­sulted in a de­cline across Cana­dian banks, with Royal Bank (TSX:RY) los­ing 0.62 per cent to $92.75, CIBC (TSX:CM) fall­ing 1.26 per cent to $94.48, and TD Bank (TSX:TD) drop­ping 0.74 per cent to $63.42 a share.

“Moody’s looks at this on a pe­ri­odic ba­sis. The re­al­ity is that pri­vate sec­tor debt is get­ting higher and higher in Canada and the con­sumer is more in­debted,’’ said John Stephen­son, pres­i­dent and CEO at Stephen­son & Co. Cap­i­tal Man­age­ment.

“There are wor­ries that Canada could be in a sit­u­a­tion sim­i­lar to what hap­pened in the U.S. I think there is scant chance of that. Nonethe­less that’s on the mind of the rat­ings agen­cies.’’

Else­where, shares in Aimia Inc. (TSX:AIM) fell $5.60, or 62.71 per cent, to $3.33 af­ter the coun­try’s largest air­line, Air Canada (TSX:AC), an­nounced it was not re­new­ing its con­tract with the loy­alty points com­pany and was in­stead start­ing its own in­house pro­gram.

One bright spot was plane and train maker Bom­bardier Inc. (TSX:BBD.B), which saw its stock rally af­ter Pierre Beau­doin, the scion of the fam­ily that con­trols the com­pany, an­nounced he was step­ping down as ex­ec­u­tive chair­man af­ter he be­came a fo­cal point of pub­lic protests and share­holder frus­tra­tion. Its shares rose 7.8 per cent, or 16 cents, to $2.21.

On Wall Street, in­dices were lower amid a round of dis­mal earn­ings from re­tail­ers Macy’s and Kohl’s.

The Dow Jones in­dus­trial av­er­age lost 23.69 points to 20,919.42, the S&P 500 in­dex shed 5.19 points to 2,394.44, and the Nas­daq com­pos­ite in­dex was down 13.18 points to 6,115.96.

“It was look­ing like a pretty good earn­ings sea­son south of the bor­der,’’ said Stephen­son, not­ing that the dis­ap­point­ing re­sults raise the ques­tion about why con­sumers aren’t shop­ping in an econ­omy that shows signs of strength.

The Cana­dian dol­lar dipped 0.18 of a U.S. cent to an av­er­age value of 72.96 cents US.

In com­modi­ties, the June crude con­tract was up 50 cents at US$47.83 per bar­rel and the June nat­u­ral gas con­tract was up eight cents at US$3.38 per mm BTU.

The June gold con­tract gained $5.30 at US$1,224.20 an ounce and the July cop­per con­tract was up a penny at US$2.51 a pound.

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