TSX advanceS on oil paTch acquiSiTion
TORONTO • The Toronto stock market closed higher Wednesday amid a major oil patch acquisition along with earnings disappointments and dividend cuts in the resource sector.
The S&P/TSX composite index gained 42.26 points to 14,119.73 as investors also considered another example of how the U.S. economy is being hit by severe winter weather.
The Canadian dollar fell US1.08¢ to US90.24¢.
New York indexes were lower as the U.S. Commerce Department reported that U.S. housing starts fell by 10% to an annualized rate of 899,000 in January, down 16% from December. In December, construction had fallen almost 5%.
“The housing data was soft and, to a certain extent, I think the ongoing weather distortions will probably continue through another month because February hasn’t been any better in the U.S.,” said Colin Cieszynski, senior markets analyst at CMC Markets.
The Dow Jones industrials fell 89.84 points to 16,040.56, the Nasdaq was 34.83 points lower at 4,237.95 and the S&P 500 lost 12.01 points to 1,828.75.
Markets also reacted negatively to the mid-afternoon release of the minutes from the January meeting of the U.S. Federal Reserve, where officials decided to further cut back on Fed bond purchases.
Officials discussed the need to stress to investors that the Fed’s key short-term interest rate would remain near zero but they couldn’t agree on how to modify their commitment to keep the rate near zero “well past” the time unemployment falls below 6.5%. The rate is now 6.6%.
On the earnings front, Sherritt International Corp. reported a $38.1-million adjusted net loss in the fourth quarter, equal to 13¢ per share as it recognized a $466.8-million impairment loss related to the sale of its coal business. Analysts had expected Sherritt’s adjusted earnings would break even.
Sherritt also cut its quarterly cash dividend to one cent from about 4¢ per share. Its stock fell 41¢ or 11.95% to $3.02.
Cargojet shares jumped $3.72 or 25.91% to $18.08 after the cargo carrier was awarded a domestic air cargo network services contract for the Canada Post group of companies, including Purolator’s national air cargo network.
The energy sector led advancers, up 1% as the March crude contract in New York gained 88¢ to US$103.31 a barrel.
Canadian Natural Resources Ltd. jumped $1.45 or 3.7% to $40.63 as it said that it will pay $3.125-billion in cash to buy conventional oil and gas assets near its core areas in Western Canada in a major land deal with Devon Canada.
“And it’s a conventional pickup, which is not a bad thing for them because they have such a big piece of oil sands and this is more conventional oil so it probably balances out their production a bit more,” Mr. Cieszynski said.
Financials were supportive with the group up 0.57%. The gold sector led decliners, down about 2% as April bullion faded $4.10 to US$1,320.60 an ounce.
The base metals sector was down 0.69% while March copper was unchanged at US$3.29 a pound.