By Sarah Pringle, MarketWatch
SAN FRANCISCO (MarketWatch) — Canadian stocks stumbled Thursday over concerns about global central-bank action to boost flagging economic growth, as well as caution surrounding upcoming jobs data and earnings reports.
Canada’s resource-heavy benchmark equities index sank 0.81% to settle at 11,816.91. Leading the index lower, the materials sector /zigman2/quotes/210598474/delayed XX:TORGC195 -0.95% — which includes several large gold miners — fell 0.77%.
Faring even worse, the health-care sector /zigman2/quotes/210598485/delayed XX:TORGC191 -2.26% lost 1.15%.
A leading decliner in the sector was SXC Health Solutions Corp. , whose shares fell 5.6% despite Credit Suisse raising its target price on the parent company to $111 from $109.
The market was pressured as China’s central bank cut interest rates for the second time in about a month. Meanwhile, the European Central Bank slashed rates to their lowest level ever and the Bank of England extended the size of its quantitative-easing program.
“There may have been some disappointment that the ECB didn’t announce further measures beyond a simple rate cute,” said Peter Buchanan, senior economist at CIBC world markets, regarding the declines seen in gold and energy stocks..
Among the poorest performing gold stocks Thursday were Centerra Gold /zigman2/quotes/209218682/delayed CA:CG -3.89% , dropping 6%, and NovaGold Resources /zigman2/quotes/202931372/delayed CA:NG -0.68% , down 4%.
Gold for August delivery fell 0.8% to settle at $1,609.40 an ounce on the New York Mercantile Stock Exchange. Read more about gold.
Buchanan added that the timing of the rate cut by the People’s Bank of China was a bit of a surprise and that people may by “reading that as a sign that economic numbers that we get from China next week could be quite bad.”
In U.S. data, the Institute for Supply Management said its gauge of the services sector was the weakest since January 2010, falling to 52.1% from 53.7% in May. Read more about the ISM report.
Baystreet also remained bearish as Canada’s jobs data is scheduled for release Friday, said Buchanan.
Further,”equity markets in general are wary at this point because we do get the first of major earnings reports next week — there is a lot of uncertainty with trouble in Europe,” added Buchanan.
Shares of commodities producers headed in both directions, with Caledonia Mining Corp. rallying 13.8%, Sacre-Coeur Minerals adding 5.6% and, on the downside, Taseko Mines Ltd. /zigman2/quotes/201869930/delayed CA:TKO -0.97% losing 3.2%.
Calfrac Well Services Ltd. /zigman2/quotes/202132416/delayed CA:CFW -0.61% shares fell 3% after GHS Research lowered its earnings estimates for the company. Citing early warnings for second-quarter results by pressure-pumping competitors, GHS trimmed second-quarter earnings estimates to C$0.02 from C$0.21, and cut its price estimate to C$33, from C$35 .
In corporate news, plane and train manufacturer Bombardier announced Thursday a technology licence agreement with CSR Puzhen, a subsidiary of China South Locomotive & Rolling Stock Corporation Ltd. Class B shares of Bombardier /zigman2/quotes/208994866/delayed CA:BBD.B -5.79% added 1.9%.
The Canadian dollar fell against its U.S. counterpart /zigman2/quotes/210561978/realtime/sampled USDCAD -0.3038% , with one U.S. dollar buying C$1.0141 vs. C$1.0133 Wednesday. The U.S. dollar has gained 2% on Canada’s loonie over the past three months.