By Sarah Pringle, MarketWatch
SAN FRANCISCO (MarketWatch) — Canadian stocks finished lower Wednesday after the U. S. Federal Reserve noted lackluster growth and offered no further stimulus, as gold and other commodity companies weighed most heavily on the market.
“In sum, nothing new here, which is what we expected so early in its current term extension program, and we lean slightly toward December rather than September for the adoption of a third round of [quantitative easing],” said Avery Shenfeld, chief economist at CIBC World Markets.
“The results will disappoint some in the equity markets that had pinned their hopes on new measures today. Bearish for equities and other risk assets as a result,” added Shenfeld. Read more on the Fed policy meeting.
Toronto’s resource-heavy benchmark equities index /zigman2/quotes/210598478/delayed CA:GSPTSE +0.09% fell 46.18 points, or 0.4%, to finish at 11,618.53. The Canadian market fared worse than losses south of the border, where the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.04% and Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.38% also saw modest declines.
A 1.4% decline in the metals and mining sector , followed by a 1.1% loss in the materials sector /zigman2/quotes/210598474/delayed XX:TORGC195 -2.07% and 0.8% fall in utilities equities /zigman2/quotes/210598464/delayed XX:TORGC193 +0.23% dragged down the market.
Expectations too high for Fed, ECB?
In the context of Mario Draghi's “whatever it takes” comment, are hopes set unattainably high for the Fed and ECB?
Weakening commodity companies included a 12.5% fall in shares of Satori Resources Inc. /zigman2/quotes/208279498/delayed CA:BUD 0.00% and 6.3% retreat in shares of Oracle Mining Corp.
Gold miners also weakened, with shares of Kinross Gold Corp. /zigman2/quotes/200423011/delayed CA:K -4.08% shaving off 4.4% and IAMGOLD Corp. /zigman2/quotes/206182143/delayed CA:IMG -3.50% trading down 3%.
In line with losses among Canadian gold stocks, gold for August fell 0.4% to settle at $1,603.70 an ounce on the New York Mercantile Exchange, on investor concerns surrounding further monetary stimulus action by central banks. Read more on gold.
On the economic front, manufacturing in July reportedly slowed, with the RBC Canadian Manufacturing Purchasing Managers Index slipping to 53.1, from 54.8 the previous month.
Although at slower rates, new orders and output both increased, according to RBC. And for the sixth-straight month the nation saw rising employment in the manufacturing sector, also at a decelerating rate.
In earnings, oil and gas producer Talisman Energy Inc. posted a 72% lower second-quarter profit from a year ago, citing weak commodity prices.
However, shares of Talisman shot up 7.3% as production increased 4% from the same quarter a year ago.
Torstar Corp.’s second-quarter net income tumbled 68%. The media and book publishing company said that a soft advertising environment as well as declines in print revenues served as drags on the quarter.
Class B shares of Toronto-based Torstar subsequently fell 5.5%.
In other news, Catch the Wind Ltd. announced Wednesday a full rebrand of the company, which will begin operating as BlueScout Technologies, Inc. The wind sensor system developer said its trading symbol will reflect changes in coming weeks.
Shares of the Manassas, Va.-based company fell 6.7% by session’s end.
In currency trading, the greenback made up for earlier losses as it gained 0.16% against the Canadian currency /zigman2/quotes/210561978/realtime/sampled USDCAD +0.1793% following the Fed’s report, with one U.S. dollar purchasing C$1.0049 vs. C$1.0033 Tuesday.
Add to watchlist
CA:GSPTSE
Add to watchlist
DJIA
Add to watchlist
CA:BUD
Add to watchlist
CA:K
Add to watchlist
CA:IMG
Add to watchlist
USDCAD
