Canadian stocks fell, after reaching a five-month high, as technology companies dropped and investors weighed reports on domestic and U.S. jobs growth amid growing tensions between America and Russia over Syria.
BlackBerry Ltd. (BB) dropped 2.7 percent, snapping three days of gains. Bombardier Inc. lost 1 percent after rallying the most in four months yesterday. Torex Gold Resources Inc. and B2Gold Corp. added at least 4.8 percent as the price of gold climbed. Air Canada, the nation’s largest airline, jumped 3.1 percent after announcing it will refinance its long-term debt at a lower cost. Suncor Energy Inc. rose 1.2 percent as crude rallied to a two-year high.
The Standard & Poor’s/TSX Composite Index (SPTSX) fell 24.14 points, or 0.2 percent, to 12,820.92 at 4 p.m. in Toronto, paring the weekly gain to 1.3 percent. The S&P/TSX closed at its highest level since March 12 yesterday.
“We’re seeing a bit of technical selling after the TSX reached a short-term high yesterday and has had a pretty good run the past few weeks,” said Youssef Zohny, a portfolio manager with Stenner Investment Partners of Richardson GMP Ltd. in Vancouver. Richardson GMP manages about C$15 billion ($14.4 billion).
Data (CANLNETJ) showed Canadian employment increased by 59,200 last month and the jobless rate fell to 7.1 percent from 7.2 percent. Economists surveyed by Bloomberg projected a 20,000 job increase and an unchanged jobless rate.
“Given the improved tone in the global economy, Canada is poised to enter a period of higher-than-potential growth resulting in more consistent gains in hiring and a gradual decline in the unemployment (USURTOT) rate,” Dawn Desjardins, assistant chief economist at RBC Capital Markets, said in a note to clients today.
In the U.S., employers added 169,000 workers in August, following a revised 104,000 rise in July that was smaller than first reported. Economists surveyed by Bloomberg had called for a 180,000 gain. Unemployment fell to 7.3 percent from 7.4 percent. The data fueled speculation that any reduction in Federal Reserve stimulus will be limited.
“People were feeling pretty good about things going in with the jobs data, but with a print like this, maybe the U.S. economy isn’t ready for tapering,” said Michael O’Brien, fund manager with TD Asset Management Inc. in Toronto. The firm manages about C$216 billion ($207 billion).
Technology stocks declined 1.1 percent as eight of 10 groups in the S&P/TSX retreated. Trading volume was 14 percent below the 30-day average.
BlackBerry dropped 2.7 percent to C$11.29. The smartphone maker had risen 9 percent in the past three days amid speculation BlackBerry may sell itself as soon as November.
Niko Resources Ltd. (NKO) slumped 10 percent to C$3.68 after Darren Engels, an analyst with FirstEnergy Capital, lowered his rating to underperform from market perform and cut his price target to C$3 from C$8.50 after accounting for the company’s financing needs and potential capital spending.
Suncor gained 1.2 percent to C$36.68 and Bankers Petroleum Ltd. advanced 3 percent to C$3.80 as crude gained 2 percent to $110.53 a barrel in New York, the highest since May 2011.
Bombardier lost 1.4 percent to C$4.91. The stock rallied 5.5 percent yesterday, the most since May 9, after announcing the sale of one of its units along with a jet order worth a minimum of $1.8 billion.
B2Gold added 4.8 percent to C$2.85 and Torex Gold jumped 8.1 percent to C$1.61. Gold rebounded from a two-week low, rising 1 percent to $1,386.50 an ounce in New York.
Air Canada increased 3.1 percent to C$3.03. The airliner plans to refinance about C$1.1 billion of its outstanding senior notes to extend the maturity of Air Canada’s long-term debt and lower costs of financing.
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