TSX drops amid Europe anxiety, US sell-off, RIM shares fall ahead of quarterly reportReported by Proactive Investors on Thursday, 28 June 2012 (on June 28, 2012)
|
Toronto's main market fell modestly on Thursday afternoon as investors grew anxious about the outcome of the 2-day European Union summit beginning today, and as a US Supreme court announcment upholding President Obama's healthcare reform sparked a broad sell-off in the US.
In the US, justices voted for the most part to keep in place the 2,700-page measure designed to get all Americans insured and to begin to chip away at spiraling cost inflation in the U.S. health-care system.
Chief Justice John Roberts and four other justices determined that the mandate forcing individuals to buy insurance or pay a penalty — the centerpiece of the law — violated the Interstate Commerce Clause, but was constitutional under Congress’s taxing powers.
The sell-off was sparked in the US as traders fear that healthcare costs could further weaken economic growth. The law requiring Americans to purchase health insurance might act like an additional tax, which could lead to consumers cutting even further back on spending.
In Europe, many similar summits have come and gone with no concrete resolution, but investors are still expecting some small progress as well the laying of the ground work for future growth.
Spain is of particular concern, as it has seen its yields skyrocket recently, and earlier this week made a formal request for aid for its struggling banking sector.
Italy is also on the radar with borrowing costs rising as well, with the yield on the 10-year bond hovering around 6.2%.
Cyprus also earlier this week became the fifth euro country to ask for financial assistance from its partners in the currency zone.
As of around 12:30pm ET in Toronto, the S&P/TSX Composite was down 60.4 points, or 0.53%, to 11,350.54, despite a $5.5 billion deal in the oil and gas sector, while the more junior S&P/TSX Venture Composite dropped 8.34 points, or 0.71%, to 1,163.09.
Commodities were sharply in the red, with crude for August delivery down $1.79 to $78.42 a barrel, and gold for August lower by $23.2 to $1,555.2 an ounce.
Silver futures fell 57.5 cents to $26.42 an ounce, while the base metal copper contract dropped 2.5 cents to $3.33 a pound.
In Toronto, the energy sector was the only one gaining, with losses led by materials, metals and mining, and financials stocks.
Advances in energy were led by a $5.5 billion acquisition of Progress Energy Resources (TSE:PRQ) by Malaysian national oil and gas firm Petronas. Petronas Carigali, the Canadian unit of Petronas, will pay C$20.45 per share in cash to shareholders of Calgary-based oil and natural gas company Progress.
The transaction represents a 77 per cent premium to Progress’ closing share price of $11.55 on the Toronto Stock Exchange on Wednesday, with shares on Thursday rising around 74%.
Elsewhere in the sector, Encana Corp (TSE:ECA) was up almost 5%, Talisman Energy (TSE:TLM) gained 3.5%, and Advantage Oil & Gas (TSE:AAV) rose 6%. But Suncor Energy (TSE:SU) and Canadian Natural Resources (TSE:CNQ) were both down over 1%.
In mining, Eastern Platinum (TSE:ELR) sunk more than 9%, while Goldcorp (TSE:G) shed 3.8% and Barrick Gold (TSE:ABX) was down a more modest 1.4%. Copper heavyweight Teck Resources (TSE:TCK.B) also retreated 1.3%.
Centerra Gold (TSE:CG) shares plunged more than 17% Thursday, after the Canadian miner said a Kyrgyzstan-based independent member of its board had stepped down.
The announcement came one day after Kyrgyz lawmakers moved to review Centerra's mining contract for its Kumtor gold mine in the central Asian country.
Financials were also lower, with insurer Manulife Financial (TSE:MFC) down over 2%, and Bank of Nova Scotia (TSE:BNS) and Royal Bank (TSE:RY) retreating by 1.7% and 1.3%, respectively.
In Canadian corporate news, BlackBerry maker Research in Motion (TSE:RIM) (NASDAQ:RIMM) is due to report after the bell today, and is expected to post an adjusted loss of eight cents a share for the three months that ended June 2. Shares were down over 1.5% in afternoon trading on the Toronto Stock Exchange.
Oil and natural gas firm Niko Resources (TSE:NKO) drilled into the red in the fourth quarter due to a major impairment charge.
Net loss for the three months ended March 31 was US$183.3 million or $3.55 per share, reversing a profit of US$6.2 million or 12 cents per share a year earlier. A US$133 million impairment charge was related to its D6 block holdings in offshore India.
Oil and natural gas revenue fell to US$71.4 million from US$94.2 million, due to a decrease in gas production from the D6 block.
Shaw Communications (TSE:SJR.B) reported a profit of $248-million, or 53 cents per share, in its fiscal third quarter, a 22% increase, beating analyst estimates.
On the economic front, Statistics Canada reported that average weekly earnings of non-farm payroll employees were $896.63 in April, up 1.0% from the previous month. On a year-over-year basis, earnings increased by 3.1%.
*US/Europe *
U.S. markets tumbled Thursday afternoon, as European leaders gathered for another summit, and after the U.S. Supreme Court upheld the Affordable Care Act of 2010.
The Dow was lately down 1.1%, or more than 135 points, while the other two main US indices saw similar percentage losses.
WellPoint (NYSE:WLP) shares tumbled more than 5% and were halted after the Supreme Court ruling.
Shares of health insurance companies fell sharply, while hospital stocks posted large gains. Insurers UnitedHealth (NYSE:UNH) and Humana (NYSE:HUM) dropped between 2% to 4% while hospital stocks including Community Health Systems (NYSE:CYH) and HCA (NYSE:HCA) rose between 6% to 7%.
Shares of JPMorgan (NYSE:JPM) and other US banking stocks remained in the red after a New York Times report this morning said trading losses at JPMorgan could reach as high as $9 billion.
Meanwhile, bank shares in London crashed as the UK's chancellor George Osborne said Barclays (LON:BARC) was “not alone” in its guilt of fixing the interest rates at which banks lend to each other in a statement to parliament today.
The bank has to pay fines totalling £290 million to the Financial Services Authority and US regulators for manipulating the Libor (London interbank offered rate) and Euribor (Euro interbank offered rate) rates.
The chancellor said four global banks are also being investigated: UBS, (NYSE: UBS) HSBC (LON:HSBA) Citigroup (NYSE:C) and Royal Bank of Scotland (LON:RBS).
In other corporate news, News Corp. (NASDAQ:NWSA) shares fell as it confirmed plans to split into two separate companies, one holding its newspaper business and the other its entertainment operations. Under the proposal, the global media giant will be divided into two publicly traded companies.
One entity will operate as a newspaper and book publishing firm - holding the Harper Collins publishing house and The Times newspaper group. The other will be an entertainment company that includes the 20th Century Fox movie studio, the Fox broadcast TV network and the Fox News channel.
Shares in Anthera Pharmaceuticals (NASDAQ:ANTH) plummeted after the company revealed yesterday its study for the treatment of lupus failed to meet its primary target.
Discount retailer Family Dollar (NYSE:FDO) Thursday reported that third-quarter profits grew over 12 per cent as shopper traffic increased and spent more, but shares dropped more than 3% as results fell short of analyst expectations.
Nike (NYSE:NKE) is expected to post earnings after the bell today, of $1.37 a share on $6.5 billion in revenue. Shares were lately down more than 1.7%.
On the economic slate, the U.S. Labor Department reported Thursday that weekly jobless claims dropped 6,000 to 386,000, slightly more than expected.
The final estimate of first-quarter U.S. GDP growth was also in line with expectations at 1.9%.
European markets finished broadly lower today with shares in Germany leading the region. The DAX was down 1.81% while France's CAC 40 was off 1.27% and Britain's FTSE 100 fell lower by 0.37%.
Links:  Full news story
|
|
| | Recent related news |
| |
DailyFinance
12 hours ago | Filed under: Investing
LONDON -- To me, capital growth and dividend income are equally important.... |
DailyFinance
17 hours ago | Filed under: Investing
LONDON -- We're pretty busy with annual results from companies in the *FTSE... |
DailyFinance
2 days ago | Filed under: Investing
LONDON -- Dividend income accounts for about two-thirds of total returns,... |
DailyFinance
2 days ago | Filed under: Investing
LONDON -- The recent turnaround story at *Thomas Cook Group* has been... |
Zero Hedge
2 days ago | · As scandals mount, White House springs into damage control (Reuters)
· Glencore Xstrata chairman... |
| |
SmartMoney.com
2 days ago | By Barbara Kollmeyer U.S. stock market futures dipped ahead of Wall Street's open Thursday as global... |
Proactive Investors
3 days ago | *¤ YESTERDAY IN GOLD & SILVER*
Gold was under selling pressure right from the 6:00 p.m. EDT time... |
Huffington Post
3 days ago | PARIS — The recession across the economy of the 17 European Union countries that use the euro... |
Proactive Investors
4 days ago | U.S. stocks rose as markets looked poised to record their 18th straight Tuesday gain as recent... |
Proactive Investors
4 days ago | U.S. stocks rose as markets looked poised to record their 18th straight Tuesday gain as some economic... |
| |
|
|
|
|
Facebook
E-mail
Twitter
Mixx
StumbleUpon
FriendFeed