Canadian stocks fell for a third day after the U.S. reported an unexpected increase in initial jobless claims and European purchasing managers reported slower growth.
Manulife Financial Corp., North America’s third-largest insurer, dropped 1.7 percent after the U.S. Labor Department said first-time unemployment applications climbed 12,000 to 465,000 last week. Suncor Energy Inc., the country’s largest oil and gas producer, slipped 1.4 percent as crude oil decreased 1.1 percent. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, lost 2.3 percent after rising for the first time in seven days yesterday.
The Standard & Poor’s/TSX Composite Index retreated 19.12 points, or 0.2 percent, to 12,128.14 as of 10:46 a.m. in Toronto. The index has dropped 0.9 percent since closing at a four-month high Sept. 20.
“People are taking a bit of time here to reason whether the valuations or the expectations that are built into some of the stocks are reasonable,” said Greg Eckel, who helps oversee C$900 million ($870 million) as a money manager at Morgan Meighen & Associates Ltd. in Toronto. “Europe had some bad news on the purchasing number, and the jobs number was bad. It’s a real mixed picture.”
The S&P/TSX has underperformed all but three of 23 other developed markets’ equity benchmarks this month, hampered by a decline in energy stocks. Energy companies make up 25 percent of Canadian stocks by market value.
Economists had forecast the U.S. would report 450,000 new jobless claims today, according to the median of 47 estimates in a Bloomberg survey. The total had dropped to a revised 453,000, the lowest in nine weeks, in the week ended Sept. 11.
An index of service and manufacturing industries based on a Markit Economics survey of euro-area purchasing managers fell to 53.8 from 56.2 last month. The median estimate of 15 economists was 55.7. A reading above 50 indicates expansion.
The S&P/TSX Banks Index declined for a fourth day, while S&P/TSX insurers retreated for a third day.
Manulife, which derived 64 percent of its revenue from the U.S. last quarter, lost 1.7 percent to C$12.57. Toronto-Dominion Bank, which has 1,049 U.S. branches, decreased 0.9 percent to C$73.58.
Crude futures retreated to $73.87 a barrel in New York. Suncor fell 1.4 percent to C$31.90. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, dropped 1.1 percent to C$33.11. Canadian Oil Sands Trust, the largest owner of the Syncrude project, declined 1.8 percent to C$25.86.
Teck, which produces raw materials used in industry, lost 2.3 percent to C$39. Copper producer Inmet Mining Corp. decreased 1.3 percent to C$57.05.
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