An oil pump jack pumps oil in a field near Calgary July 21, 2014.Todd Korol/Reuters
Energy stocks helped pull the Toronto stock market lower Thursday as oversupply concerns pushed down crude oil prices.
The S&P/TSX composite index declined 88.31 points to 14,873.93.
The April crude oil contract in New York fell 70 cents to US$43.96 a barrel and the energy sector gave back 2.75 per cent.
Oversupply concerns have hit prices hard recently with crude down 14 per cent over the past eight sessions as inventories continue to climb. U.S. oil stockpiles rose by 9.6 million barrels last week – much more than expected. The latest worry is that oil storage space is becoming full, which could further depress prices.
"Once that is gone then what are you going to do with it?" said Philip Petursson, director of institutional equities at Manulife Asset Management.
"There's no refining capacity, so essentially we're going to have to see production come down or people are going to have to sell it at a deep discount to the current price."
The Canadian dollar gave back a good-sized chunk of a 1-1/4-cent surge Wednesday after the U.S. Federal Reserve's much-anticipated rate announcement. The loonie was down 0.97 of a US cent to 78.58 cents Thursday.
The Fed signalled it wants to see the job market improve and inflation to come off its lows before it begins raising rates.
New York markets had rallied in the wake of the Fed announcement Wednesday, but on Thursday the Dow Jones industrials lost 117.2 points to 17,959.03 and the S&P 500 index declined 10.23 points to 2,089.27. The Nasdaq rose 9.55 points to 4,992.38.
"It would appear from the reaction yesterday, investors would rather have interest rates stay lower for longer than see the economy improve," Bruce McCain, who helps oversee more than $25 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said by phone. "We're stepping back a little from what occurred yesterday and we might be in for a period of consolidation."
The S&P 500 is on track to go 22 consecutive sessions without back-to-back gains, the longest since a 23-day stretch in June 2010. It never fell four days in a row in 2014.
On the TSX, selling pressure also came from the base metals component, which fell 1.4 per cent even as the May copper contract gained nine cents to US$2.66 a pound.
The gold sector added 0.2 per cent with the April bullion contract ahead $17.70 to US$1,169 an ounce. The market also found support from consumer discretionary companies and the tech sector.
On the corporate front, Potash Corp. of Saskatchewan fell $1.23 to $41.14 as it said that the Saskatchewan government's 2015-2016 budget is expected to hurt its 2015 pre-tax earnings to the tune of $75-million to $100-million. The province is dealing with sharply lower oil revenues and will require potash mining companies to take tax deductions based on their capital spending over a longer period of time, which would boost provincial revenue by $150-million.
U.S. retailer Target has proposed to pay US$10-million to settle a class-action lawsuit brought against it following a massive data breach in 2013. The retailer says individuals affected by the breach could be reimbursed up to a maximum of $10,000.
The Canadian Radio-television and Telecommunications Commission announced Thursday after the close of markets that viewers will be able to buy only the channels they want, one by one or in small packages. By the end of 2016, TV subscribers will have the option of adding those networks to a slimmed-down, "skinny" basic package costing no more than $25 per month. BCE was up 20 cents to $53.73, Rogers Communications fell 16 cents to $43.54, and Shaw Communications dipped 12 cents to $28.62.
In the U.S., Apple joined the Dow today with the fifth highest weighting in the index at 4.7 per cent. The company accounts for 15 per cent of the Nasdaq 100 Index and 4 per cent of the S&P 500. It closed down 97 cents at $127.50 (U.S.).
While Apple enters the average, it's Goldman Sachs Group Inc. that will see its influence on the 118-year-old gauge solidified, garnering the biggest weighting after a stock split this week by Visa Inc.
With Goldman Sachs primed to become the biggest piece of the Dow, earnings for banks in the S&P 500 are forecast to decline in each of the next two quarters. They will see profit contract 0.7 per cent in the first quarter, followed by a 2.9 per cent decrease in the second quarter, strategist data compiled by Bloomberg show.
Jobless claims rose by 1,000 to 291,000 in the seven days ended March 14, from a revised 290,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 51 economists surveyed by Bloomberg called for 293,000.
Philadelphia Fed's factory index for March declined more than economists forecast. A Conference Board index of leading indicators, a measure of the outlook for the next three to six months, climbed 0.2 per cent in February, following a similar rise in January.
With files from Bloomberg News