Canadian stocks fell as energy producers declined with an unexpected gain in oil supplies and financial shares dropped when U.S. Federal Reserve Chairman Ben S. Bernanke’s testimony to Congress heightened concerns the recovery is faltering.
Bank of Nova Scotia, Canada’s third-biggest bank, slipped 2.1 percent after Bernanke said “the economic outlook remains unusually uncertain.” EnCana, Canada’s largest natural gas producer, lost 4.6 percent after reporting second-quarter profit that missed the average analyst estimate. Research In Motion Ltd. decreased 3.1 percent after smartphone rival Apple Inc. forecast $18 billion in fourth-quarter sales, 5.9 percent more than the average analyst estimate.
The Standard & Poor’s/TSX Composite Index retreated 116.55 points, or 1 percent, to 11,513.33. Most of the drop came after Bernanke’s statement, in which he devoted almost 10 times as many words to the exit from stimulus as he did to potential actions to boost growth.
“Demand isn’t there, the consumer is retrenching, the stimulus has ended,” said Michael Sprung, president of Sprung & Co. Investment Counsel Inc. in Toronto. “What is going to keep the momentum going forward? So what his comments have done is feed some doubts into the robustness of the economy.”
After climbing 4.6 percent this year through its 2010 high on April 26, the S&P/TSX has fallen 6.3 percent since then. The benchmark dropped on concern over the possibility of sovereign debt default in Europe and unease about the sustainability of the economic recovery in the U.S.
S&P/TSX financial companies may also have suffered from an unexpected decline in wholesale sales in Canada. Sales slipped 0.1 in May, Statistics Canada said today. All 15 economists in a Bloomberg survey had forecast an increase.
Royal Bank of Canada, the country’s largest bank, fell for a fourth day, losing 2.9 percent to C$52. Scotiabank dropped 2.1 percent to C$50.01. Manulife Financial Corp., North America’s third-biggest insurer, lost 2.3 percent to C$14.63.
EnCana’s per-share earnings trailed the average analyst estimate by 51 percent, excluding certain items. Adjusted net income was the lowest since at least 1999. Including one-time non-operational charges, the Calgary-based company had a $505 million loss. EnCana sank 4.6 percent, the most in a year, to C$32.90.
Other energy companies dropped after the U.S. Energy Department said crude oil inventories increased by 360,000 barrels last week. Most economists in a Bloomberg survey had forecast a decrease. Oil futures slipped 1.3 percent.
Suncor Energy Inc., Canada’s largest oil and gas company, declined 1.8 percent to C$32.54. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, decreased 1.6 percent to C$35.92. Talisman Energy Inc., which produces oil and gas in North America, the North Sea and Indonesia, retreated 1.4 percent to C$16.61.
RIM, Canada’s largest technology company, slid 3.1 percent to C$55.94 after Apple’s fourth-quarter earnings beat the average analyst estimate by 11 percent, excluding certain items. RIM’s share of the global smartphone market in the first quarter shrank to 19.4 percent from 20.9 percent last year, while Apple’s increased to 16.1 percent from 10.9 percent, market- research firm IDC said in May.
Red Back Mining Inc., which produces gold in Africa, slumped 3.3 percent to C$24.46 after reducing its 2010 production forecast. The company has suffered from water pipe failures at its mine in Mauritania.
Alimentation Couche-Tard Inc., the owner of Circle K and Mac’s convenience stores, surged 4.2 percent to a seven-month high of C$21.31. Toronto-Dominion Bank analyst Michael Val Aelst raised his rating on the company to “action list buy” from “buy,” saying in a note that his previous estimates for expenses and depreciation were too high.