By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — Canadian stocks fell Tuesday, with pressure from the energy group as crude prices settled lower for a second consecutive session.
The S&P/TSX Composite Index /zigman2/quotes/210598478/delayed CA:GSPTSE +1.85% fell 24 points, or 0.2%, at 12,422.71, its second straight loss.
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Energy stocks as measured by the S&P/TSX Capped Energy Index /zigman2/quotes/210598495/delayed XX:TORGC187 +3.29% fell 0.9%, pulling back alongside crude for October delivery /zigman2/quotes/209726775/delayed CLV22 +1.85% . Crude-oil futures settled 13 cents, or 1.4%, lower at $95.29 a barrel on the New York Mercantile Exchange. Oil prices last week reached $100 a barrel after the U.S. Federal Reserve pledged more bond purchases to aid the sluggish economy.
October natural gas on Tuesday turned lower, down 9 cents, or 3.2%, at $2.77 per million Thermal units.
Among energy stocks that fell Tuesday were EnCana Corp. , down 1.7%, and Nexen Inc. , giving up 0.6%. Canadian Natural Resources Ltd. /zigman2/quotes/203742161/delayed CA:CNQ +0.84% declined 1.2%.
A downgrade of open-end investment trust Penn West prompted a 4.5% decline in its shares. Macquarie cut its rating on the shares to underperform from neutral, citing Penn West’s current valuation “combined with risk for a dividend cut,” as reasons for the downgrade.
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“We view the company’s move to sell assets and improve balance sheet liquidity ... as a positive step; however, we continue to have underlying concerns about the sustainability of the company’s current dividend due to below-average capital efficiencies,” Macquarie analysts Cristina Lopez and Charlene Liu wrote to clients.
In the oil market, traders debated the 2.4% drop in crude prices Monday, with much of it taking place about 20 minutes before the close of floor trading. Some had said the drop stemmed from speculation the U.S. government was considering tapping the country’s emergency reserve of oil. Meanwhile, CME Group, which owns the New York Mercantile Exchange, said there were no technical trading issues that forced oil prices to drop. Read more about Tuesday's action in oil futures.
Following market close Tuesday, the American Petroleum Institute said crude-oil inventories rose by 2.4 million barrels on the week ended Sept. 14. It also said gasoline stockpiles were up 135,000 barrels, and supplies of distillates down 1.1 million barrels. An inventory report from the U.S. Department of Energy will be released early Wednesday.
Metals stocks also struggled Tuesday, with mixed direction in metals prices. The S&P/TSX Diversified Metals and Mining Index fell 1.2%, with Teck Resources off 1.6% and Inmet Mining down 2.9%.
Prices for December gold /zigman2/quotes/210039517/delayed GCZ22 -0.06% finished a choppy trading session up 60 cents at $1,771.20 an ounce. Platinum and palladium paced losses among key metals futures following news that workers in a South African platinum mine would end their strike.
Platinum for October delivery fell $36.30, or 2.2%, to $1,636.30 an ounce, and palladium for December delivery ended down $21.75, or 3.2% lower, at $667.35 an ounce. Shares of North American Palladium Ltd. extended their fall to 5.9%.
Lonmin PLC said it signed a wage deal with workers, ending a strike at its Marikana mine that was marked by violence. Read about Lonmin's deal with striking workers in South Africa.
Elsewhere in Toronto trading, shares of Belo Sun Mining Corp. /zigman2/quotes/206668546/delayed CA:BSX +1.72% topped volume movers and fell 11% to C$1.37. The company said Monday it will raise C$50 million by selling 35.7 million common shares to underwriters for C$1.40 each. Meanwhile, federal prosecutors in Brazil are investigating the company’s gold mine development in that country, accusing Belo Sun of endangering indigenous communities in the Amazon rain forest, according to a Financial Times report.
Research In Motion Ltd. shares climbed 2.4% after the company signed a deal with Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +3.41% to license patents involving the software company’s latest Extended File Allocation Table, or exFAT, technology. The technology facilitates the exchange of large media files between desktop PCs and wireless devices. Financial terms of the agreement weren’t disclosed. More on the RIM/Microsoft licensing deal.