Canadian stocks fell for a third day as earnings at companies including Talisman Energy Inc. trailed analyst estimates and a gauge of U.S. service industries showed the weakest expansion in eight months.
Talisman, an oil and gas producer with operations in North America, the North Sea and Indonesia, dropped 5.9 percent after its first-quarter profit excluding certain items missed the average analyst forecast by 50 percent. Agrium Inc., Canada’s second-largest fertilizer producer, lost 3.7 percent after forecasting second-quarter profit below the average estimate. Iamgold Corp. rose 5.7 percent after reporting a resources increase at its Niobec niobium mine in Quebec.
The Standard & Poor’s/TSX Composite Index slipped 81.05 points, or 0.6 percent, to 13,611.32.
“Weaker corporate earnings are definitely going to have some weight on the market,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, which oversees C$1.7 billion ($1.8 billion).“We’re starting to see some big companies miss.”
The S&P/TSX decreased 2.2 percent from the beginning of the current earnings-reporting season on April 11 to yesterday while the S&P 500 advanced 2.4 percent. Earnings for companies in the Canadian stock benchmark trailed analysts’ estimates by 1.6 percent, while those of S&P 500 companies surpassed forecasts by 8 percent, according to Bloomberg data.
The Institute for Supply Management’s index of non-manufacturing companies fell to 52.8 in April from 57.3 in March. The figure trailed all 73 forecasts in a Bloomberg survey.
Talisman retreated 5.9 percent, the most since June 2009, to C$21.11. Weather delays on the Yme project in Norway “are pushing us to the bottom” of the company’s production-forecast range, Chief Executive Officer John A. Manzoni said in a press release.
Other energy shares dropped as natural gas futures declined on forecasts for cooler-than-normal weather in the U.S. South. Crude oil slipped for a third day as the U.S. Energy Department said inventories increased more last week than most analysts in a Bloomberg survey had forecast.
Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, slumped 2 percent to C$42.34. Cenovus Energy Inc., Canada’s fifth-biggest energy company, lost 1.6 percent to C$34.72. Imperial Oil Ltd., the owner of Canada’s Esso chain of gas stations, retreated 1.4 percent to C$47.70.
Canada’s six biggest banks all fell after the release of the ISM data.
Toronto-Dominion Bank, which has more than 1,000 U.S. branches, dropped 0.7 percent to C$81.39. Royal Bank of Canada, its bigger rival, declined 1.2 percent to C$58.23. Bank of Nova Scotia, Canada’s third-largest lender by assets, slipped 1.1 percent to C$57.73.
Base-metal and coal producers fell as all major industrial metals traded on the London Metal Exchange dropped.
First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, decreased 2.1 percent to C$127.20. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, retreated 1.7 percent to C$49.62.
Uranium One Inc., a mining company controlled by Moscow-based ARMZ Uranium Holding, rose 5.7 percent to C$4.44 as prices of the nuclear fuel increased. Shares of the Vancouver-based company have jumped 14 percent this week.
Agrium Inc., a fertilizer producer and agricultural-products retailer, declined 3.7 percent to a five-month low of C$80.47. The company provided a first-half forecast that indicated it will earn $3.37 a share to $3.87 a share in the second quarter, excluding certain items, compared with the average analyst estimate in a Bloomberg survey of $3.97 a share.
Iamgold surged 5.7 percent to C$19.77. The company reported a 691 percent increase in the measured and indicated mineral resource at the Niobec project. Niobium is a metal used in steel production and superconductors.
Kinross Gold Corp. and Loblaw Cos. rose after reporting earnings that beat analyst estimates. Kinross, Canada’s third-largest gold producer, rallied 4.9 percent from a 29-month low to C$14.88 after raising its 2011 production forecast. Loblaw, the country’s biggest grocery chain, surged 4.6 percent, the most since November 2009, to C$41.90.
Torstar Corp., the owner of the Toronto Star, plunged 9.5 percent, the most in 23 months, to C$12.35. The publisher reported first-quarter earnings that missed the average of six analyst forecasts by 15 percent, excluding certain items.
West Fraser Timber Co., Canada’s largest lumber producer, sank 5.3 percent to C$51 after its first-quarter revenue of C$687 million trailed analysts’ estimates of C$690 million and C$717 million.
“Prices for the company’s construction products are expected to remain volatile until the U.S. housing industry experiences sustainable recovery,” West Fraser said in a press release.