Lower oil price sends loonie down

Times Colonist - - Business - ROSS MAROW­ITS

TORONTO — Canada’s main stock in­dex ended a pos­i­tive week by clos­ing lower Fri­day as the en­ergy sec­tor sank on a fur­ther drop in the price of oil which drove the loonie to a more than four-month low.

The S&P/TSX com­pos­ite in­dex closed down 83.03 points at 15,274.44. but up from 15,150.15 a week ago.

The De­cem­ber crude con­tract was down 48 cents at US$60.19 per bar­rel to the low­est level since Fe­bru­ary.

But the mar­ket de­crease was about more than just oil, says Ca­van Yie, a port­fo­lio man­ager at Man­ulife As­set Man­age­ment. He said the third quar­ter hasn’t been a strong earn­ing sea­son. It has shown up in slow­ing rev­enue growth, higher than ex­pected op­er­at­ing costs and dis­ap­point­ing mar­gin per­for­mance.

“This was our fear sev­eral months ago when we saw in­fla­tion start­ing to creep up but it’s now man­i­fest­ing them­selves in fi­nan­cial per­for­mance,” he said.

And sev­eral large cap U.S. com­pa­nies in­clud­ing Ap­ple, Ama­zon and Google have pointed to slower growth ahead that has cre­ated some un­cer­tainty.

“Some of th­ese weaker out­looks isn’t con­struc­tive for eq­ui­ties and on top of that you also have the Fed un­wa­ver­ing on their hik­ing stance,” he said.

“So put all that to­gether and you get a clas­sic healthy cor­rec­tion in the eq­uity mar­kets.”

The cannabis-heavy health-care sec­tor led on the down­side, fol­lowed by tech­nol­ogy, con­sumer dis­cre­tionary, en­ergy and ma­te­ri­als. Util­i­ties gained the most and in­dus­tri­als rose on a par­tial re­bound by Bom­bardier Inc.

In New York, the Dow Jones in­dus­trial aver­age lost 201.92 points to 25,989.30. The de­crease was more than off­set by three days of triple-digit gains, in­clud­ing a 545point in­crease Wed­nes­day in the wake of the U.S. midterm elec­tions.

The S&P 500 in­dex was down 25.82 points at 2,781.01, while the Nas­daq com­pos­ite fell by 123.98 points to 7,406.90.

The Cana­dian dol­lar traded lower at 75.72 cents US com­pared with an aver­age of 76.25 cents US on Thurs­day.

The De­cem­ber nat­u­ral gas con­tract was up 17.6 cents at US$3.72 per mmBTU.

The De­cem­ber gold con­tract was down US$16.50 at US$1,208.60 an ounce and the De­cem­ber cop­per con­tract was down 5.15 cents at US$2.68 a pound.

Interfor Corp. shares down more than 9%

VAN­COU­VER — Interfor Corp.’s share price was trad­ing down more than 10 per cent Fri­day as the com­pany missed earn­ings ex­pec­ta­tions amid volatile lum­ber prices.

“The dom­i­nat­ing fea­ture of the third quar­ter this year was the drop in lum­ber prices that be­gan in late May and early June and con­tin­ued un­abated through the third quar­ter and into the fourth quar­ter,” said chief ex­ec­u­tive Dun­can Davies.

He said volatil­ity this year has been un­prece­dented as lo­gis­ti­cal con­straints and other fac­tors rapidly drove west­ern spruce com­pos­ite prices up $145 in the first five months of the year only to plunge $280 since to a low of $296 per thou­sand board feet.

Prices ap­pear to have bot­tomed though, said Davies, with some price gains re­cently.

Davies said the price drop in the third quar­ter put pres­sure on earn­ings, though com­pany prof­its of $28.1 mil­lion, or 40 cents per share were still up from earn­ings of $16.8 mil­lion or 24 cents per share for the same quar­ter last year.

Ad­justed net earn­ings came in slightly higher at $28.24 mil­lion, but still 40 cents per share.

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