TSX POSTS Third Straight decline
Profit-taking at the end of a great quarter for equities, along with a continuing decline in the prices of oil and gold, added up to a third straight negative close for Canada’s benchmark stock index on Thursday. The S&P/TSX composite index trimmed some of its losses by the end of the day but still ended at 12,339.36, a drop of 74.50 points, or 0.60%. Eight of the 10 subindexes declined, led by energy, which lost 0.86%, and financials, down 0.84%.
The price of crude oil fell US$2.63 to US$102.78 a barrel on Thursday as governments including those from the U.S. and France discussed releasing some of their strategic reserves in response to threats to oil supplies and to high gasoline prices.
“More jawboning from government officials that releases from stockpiles may be coming to offset potential supply disruptions and to bring prices back down has cut into the political risk premium that had grown again in recent months,” said analyst Colin Cieszynski of CMC Markets.
Initial jobless claims in the U.S. reported Thursday were lower than expected, but revisions to past weeks made them look less encouraging overall, adding to a “stream of small disappointments” in U.S. data this week that Cieszynski says leaves most traders “content to take some profits off the table for quarter-end.
“Traders also appear uninterested in stepping up and taking on new positions ahead of next week’s flurry of key monthly releases and the start of first-quarter earnings season into April. This suggests that having staged a big move up off the bottom since October, markets appear reasonably valued. A key question moving forward remains whether the improving economy can keep up to rising expectations.”
The price of gold also fell on Thursday to US$1,654.90 an ounce, a drop of US$5.60, due in part to a jewellers’ strike in India.
The Canadian dollar bounced back from earlier declines to rise 12 basis points, closing at US$1.0033.
The Dow Jones industrial average rebounded from its earlier losses in the final two hours of trading to close at 13,145.82, a gain of 19.61 points, or 0.15%. The Nasdaq remained in negative territory at the close with a loss of 9.60 points, or 0.31%, to 3,095.36. Canada’s junior Venture exchange dipped 0.49 points, or 0.03%, to 1,549.76. “Commodities are once again leading us down, even though commodity prices themselves, on an absolute basis, continue to be at very, very profitable levels for companies,” Barry Schwartz, a money manager at Baskin Financial Services Inc. in Toronto said. “The market seems to be telling us that we’re in for a rough time going forward in terms of Europe, China and demand for these commodities.”