TSX INCHES UP AS OIL HITS FIVE- YEAR LOW
TORONTO • The Toronto stock market eked out a small gain on Friday as crude oil prices settled at a five- year low.
The S& P/ TSX composite index closed relatively flat, up 3.75 points to 14,473.70. The TSX was down 1.8% for the week.
The Canadian dollar ended at US87.47¢, down US0.44¢, after a slight increase in the country’s unemployment rate in November.
TSX energy stocks pulled back 0.1% as January’s crude oil contract on the New York Mercantile Exchange fell US97¢ at US$ 65.84 a barrel — its lowest level since May 2009.
Crude oil prices have plunged about 3% since midsummer because of lower demand and a glut of supply, due in large measure to greatly increased production in the U. S. Midwest.
Economists and traders have questioned how much further the price could decline in the coming months.
“From my experience, the market overshoots to the upwards or downside,” said Allan Small, a senior adviser at HollisWealth.
“So it wouldn’t surprise me if the price of oil fell a lot more and became something ridiculous before it snapped back to a more reasonable level.”
Helping keep the TSX positive were mining stocks, which rose 1.2%, and the information technology sector, which climbed 2.5% following a deal by OpenText Corp.
The Waterloo, Ont., business software company announced it was buying software analytics company Actuate Corp., based in Silicon Valley, for US$ 330 million. OpenText intends to fund the takeover with cash on hand, and said the agreement has already been approved by boards at both companies. Shares of OpenText rose 2.9%, or $ 1.91, to $ 68.
Financial stocks on the TSX were 0.9% lower, weighed by a sell- off in banks, as the country’s biggest financial institutions wrapped up a disappointing earnings season.
Profits at Bank of Nova Scotia weakened in the fourth quarter as it recognized severance expenses for a recently announced downsizing and other items. The bank’s net income fell 14% from last year to $ 1.44 billion. Its shares fell $ 1.38 to $ 66.20.
National Bank of Canada boosted its profits a modest 3% to $ 330 million and said its quarterly dividend will rise by 4% to 50¢ per common share with the next payment. Its shares were off 70¢ to $ 49.70.
In commodities, February bullion dropped US$ 17.40 to US$ 1,190.10 an ounce, while March copper declined about a penny to US$ 2.90 a pound.
On Wall Street, the Dow Jones industrial average gained 58.69 points to 17,958.79. Nasdaq picked up 11.32 points to 4,780.76 while the S& P 500 index inched ahead 3.45 points to 2,075.37.
U. S. employers added 321,000 jobs in November, the biggest burst of hiring in nearly three years.
In Canada, the unemployment rate nudged up in November to 6.6% as 10,700 jobs were lost last month. However, Statistics Canada said the decline was within its survey’s margin of error and noted that it followed two months of strong employment growth.