Toronto stock index dragged down by weak energy results

Disappointments fuel profit-taking, expert says

Toronto’s main stock index shed more than 100 points to close the trading week as it was dragged down by the energy sector despite a boost to the price of oil.

The S&P/TSX composite index fell 130.09 points to 16169.20, although it recovered somewhat from an intraday low of 16060.58.

“Some disappointing results in the energy sector fuelled some profit-taking across the most cyclical sectors of the market this morning,” said Candice Bangsund, portfolio manager for Fiera Capital.

Exxon Mobil Corp. and Chevron Corp. each recorded massive second-quarter losses. Exxon lost $1.1 billion US on $32.6 billion in revenue, while Chevron lost $8.27 billion.

In Calgary, Imperial Oil Ltd. reported a net loss of $526 million on revenue of $3.7 billion in the three months to June 30, down from a net profit of $1.2 billion on revenue of $9.26 billion in the year-earlier period.

CEO Brad Corson said the company will be cautious in ramping up spending and that it’s unlikely spending will return to pre-COVID levels next year because of an uncertain market outlook.

Imperial’s shares lost $1.06, or 4.82 per cent, to $20.95.

The news weighed on the energy sector, the TSX’s worst performing group Friday with the capped energy index losing 2.22 per cent.

The fall came even as oil prices edged up, with the September crude contract gaining 35 cents to $40.27 US per barrel.

A softer U.S. dollar has supported the price of oil, said Bangsund, as well as earlier reports of declining stockpiles in America.

U.S. commercial crude oil inventories were at 526 million barrels as of July 24, down 10.6 million barrels from 536.6 million the previous week, according to the weekly petroleum status report from the U.S. Energy Information Administration. The figure excludes inventory in the strategic petroleum reserve.

South of the border, the major indexes finished the day ahead.

The Dow Jones industrial average gained 114.67 points to 26428.32. The S&P 500 index advanced 24.90 points to 3271.12, while the Nasdaq composite rose by 157.46 points to 10,745.27.

The December gold contract soared $19.10 US to $1,985.90 US an ounce.

“Gold continues to demonstrate some positive momentum,” Bangsund said, adding it is also thriving on the back of softer U.S. dollar.

“The U.S. dollar has weakened quite substantially in the last several months,” she said, noting in the past week weak economic data out of the states, as well as dovish remarks from the U.S. Federal Reserve further softened the greenback.

The Canadian dollar traded for 74.60 US cents compared with 74.45 on Thursday.

Elsewhere in commodities, the September natural gas contract fell three cents to nearly $1.80 US per mmBTU and the September copper contract shed about five cents to nearly $2.87 US a pound.