A worker walks on an oil pipeline at Khurmala oilfield on the outskirts of the city of Arbil, in Iraq's Kurdistan region December 4, 2013.Stringer/Iraq
The Toronto stock market was lower Thursday amid crude prices at multi-year lows and mixed earnings reports in the gold, tech and financial sectors.
The S&P/TSX composite index gave back 43.56 points, or 0.29 per cent, to 14,812.64.
The Canadian dollar declined 0.21 of a cent to 88.16 cents (U.S.).
U.S. indexes were positive with the Dow Jones industrials up 51.44 points, or 0.29 per cent, to 17,663.64, the Nasdaq ahead 15.96 points, or 0.34 per cent, to 4,691.10 and the S&P 500 index up 1.72 points, or 0.08 per cent, to 2,039.97. The energy sector was the leading TSX decliner, down 2.35 per cent while the December crude contract on the New York Mercantile Exchange dropped $1.76 to $75.42 a barrel as data from the U.S. Energy Information Administration showed crude supplies dropping by 1.7 million barrels last week.
Oil has been trading at or near multi-year lows amid slow economic growth in many regions and increased U.S. production.
But many analysts think the move down has been overdone and economic fundamentals suggest oil should be around $90 a barrel. In fact, lower prices could create the conditions that would send crude higher.
"We think North American producers will start scaling back production in a meaningful way," said Alison Mendes, portfolio manager at Manulife Asset Management. Mendes said falling prices will force marginal producers to stop producing or cut back since it is more expensive for them to produce crude.
"We're going to start seeing the 2015 capital expenditure budgets released over the next couple of weeks. And we would not be surprised to see companies announce spending plans flat to down versus 2014. And capital programs at the end of the day have to exist within cash flows."
The gold sector was down 0.2 per cent while December bullion in New York rose $3.40 to $1,162.50 an ounce.
Gold stocks have also suffered and the TSX gold sector has plunged 13 per cent in the last month but on Thursday, the group edged one per cent higher.
Gold prices have been under extreme pressure lately, heading steadily towards the $1,100 (U.S.) mark, amid an end to the U.S. Federal Reserve's latest quantitative easing program, a higher U.S. dollar and low inflation.
After the close, Iamgold Corp. posted a quarterly net loss of $72.5-million (U.S.) or 19 cents per share, compared with net income of $25.3-million or seven cents a share in the same year-earlier period. Revenue rose to $341.5-million from $293.5-million as gold sales rose to 233,000 ounces from 195,000, but the average realized price per ounce fell to $1,277 from $1,334. Its shares slipped 13 cents or six per cent to $2.04.
The tech sector was positive as IT services company CGI Group Inc. said that it had $213.7-million (Canadian) or 67 cents of net income in its fourth quarter. Ex-items, CGI earned $234-million or 73 cents per share – in line with estimates. Revenue was $2.48-billion – up about $25-million from a year earlier but short of the analyst estimate of $2.57-billion. Still, its shares gained 85 cents to $40.31.
The financials sector was also supportive. But shares in Manulife Financial were off two cents to $21.65 as the company reported core earnings of $755-million or 39 cents in the third quarter, up 7.4 per cent from a year earlier and a penny short of estimates. Manulife's net income was $1.1-billion or 57 cents per share, much higher than the 26 cents that analysts had expected. Manulife has said in the past that its core earnings are a better measure of its profitability because of the nature of its business.
The base metals component was 0.6 per cent lower while December copper was unchanged at $3.02 (U.S.) a pound.