A row of oil pumps work in the desert oil fields of Sakhir, Bahrain, Tuesday, June 10, 2014. All is not well within OPEC as the oil cartel focuses on how much crude to pump for the rest of the year. Kurds in Iraq are defying the central government and selling their oil directly abroad. Nigeria is hurting due to shale oil production in the United States, its most important customer. (AP Photo/Hasan Jamali)The Associated Press
The Toronto stock market was lower Wednesday, pulled down in part by energy stocks as traders wonder if the OPEC cartel will commit to cutting production to put a floor under oil prices that have plunged since the summer.
The S&P/TSX composite index dropped 61.76 points to 15,011.89. The energy sector fell 1.7 per cent while oil dropped 46 cents to a four year low of $73.63 (U.S.) a barrel, a day ahead of the OPEC meeting.
The Canadian dollar declined 0.1 of a cent to 88.77 cents (U.S.).
U.S. indexes were little changed with the Dow Jones industrials off 6.61 points to 17,808.33, the Nasdaq rose 8.66 points to 4,766.91 and the S&P 500 index added 0.8 of a point to 2,067.84. New York markets are winding down ahead of the U.S. Thanksgiving holiday Thursday. American markets will be shuttered, reopening Friday for a half-session.
The meeting of the Organization of Petroleum Exporting Countries Thursday has been described as the most important gathering of cartel oil ministers in many years. Prices are hovering around $75 a barrel because of a stronger U.S. dollar, lower demand and much higher supplies. Traders hope the cartel will come to an agreement to cut production in order to support prices that are down about 30 per cent from mid-summer.
There is plenty of doubt about whether the cartel will make such an agreement. On Wednesday, Saudi Arabia's oil minister, Ali Al-Naimi, said that he believes the crude market "will stabilize itself."
Elsewhere on the TSX, the base metals sector fell 1.25 per cent while March copper was down two cents at $2.96 a pound.
December bullion was unchanged at $1,197.10 an ounce but the gold sector fell 1.9 per cent.
It was a major day for U.S. economic news.
Durable goods orders in the United States put in a much better than expected showing in October, rising by 0.4 per cent. Economists had forecast that durable goods orders would drop by 0.6 per cent. Performance was driven in part by a huge boost in military aircraft orders.
The U.S. Commerce Department says that consumer spending rose 0.2 per cent last month, while September was revised from a decline to a flat reading. Income grew 0.2 per cent in October. Spending is closely watched because it accounts for 70 per cent of American economic activity.
Traders will also digest the Chicago Purchasing Managers Index, which provides a snapshot of manufacturing activity in the American Midwest; the latest take on consumer sentiment from the University of Michigan's widely-watched index, along with new home sales data.
In earnings news, farm equipment maker Deere & Co. says its sales and profits will keep falling in its new fiscal year as the sector remains weak. Deere also said it earned $649.2-million, or $1.83 per share, in the fourth quarter on $8.97-billion in revenue. Analysts expected a profit of $1.57 per share and US$7.73-billion in revenue. Its shares were down 3.1 per cent.
Hewlett-Packard Co. reported net income of $1.3-billion, or 70 cents a share, on revenue of $28.4-billion. That fell short of analyst expectations which predicted earnings of 80 cents a share on revenue of $28.7-billion. PC sales have suffered as consumers increasingly turn to smartphones and other mobile devices. Yet it's the biggest single part of HP's business, accounting for more than 30 per cent of the company's nearly $112-billion in annual revenue. HP shares gained 1.9 per cent.