Commodities drag TSX down further

The Toronto stock market closed sharply lower Thursday amid falling commodities prices and another plunge in the shares of Valeant Pharmaceuticals.

Toronto’s S&P/TSX composite index closed down 103.04 points at 13,558.78, its second consecutive day in the red after starting the week on a strongly positive note.

The metals and mining sector of the TSX was the lead decliner, slipping more than 4 per cent, while global gold declined 4 per cent.

Meanwhile, shares in Valeant Pharmaceuticals took a big hit after activist investor Bill Ackman criticized the Quebec drug company’s communication strategy in a letter to its chief executive. The company’s shares plunged more than 14 per cent, or $17.83 (U.S.), closing at $103.37.

In New York, the Dow Jones Average of 30 stocks edged 4.15 points lower to 17,863.43, while the broader S&P 500 was off 2.38 points at 2,099.93 and the Nasdaq fell 14.74 points to 5,127.74.

Stephen Lingard, senior vice-president at Franklin Templeton Solutions, said U.S. markets are “treading water” as investors wait to see whether the U.S. Federal Reserve will raise its benchmark interest rate in December. “October was a great month, and now it’s a consolidation period as we await what the Fed’s going to do next month.

“In our view it’s a great thing if they can get rates off zero, because it means the economy, at least in their view, is on a better trajectory.”

Traders appeared hesitant to make any big moves ahead of Friday’s U.S. government monthly jobs report.

The health of the employment sector is considered a major factor in the Fed’s decision to pull the trigger on interest rates. It has kept rates at historical lows near zero since 2008, which has helped provide the liquidity that has fuelled stock market growth ever since.

On commodity markets, the December gold contract lost $2 to $1,104.20 an ounce and copper shed almost seven cents to $2.255 a pound.

The December contract for benchmark crude oil slumped $1.12 to $45.20 a barrel amid recent state- ments by top officials of the Federal Reserve suggesting a higher likelihood of a rate increase in December.

Oil, like most commodities, is priced in U.S. dollars and a higher greenback tends to depress prices since that makes commodities more expensive for holders of other currencies.

One commodity moving higher was December natural gas, which shot up 10 cents to $2.36 per mmBtu after the U.S. Energy Department reported gas inventories rose less than expected in the week ended Oct. 30.

Meanwhile, the loonie was down 0.07 of a U.S. cent at 75.94 cents.

Transmission utility Hydro One made its debut on the Toronto Stock Exchange Thursday, closing at $21.62, up 5.46 per cent or $1.12 from its initial offering price of $20.50