Canadian stocks fell for a fourth day, the longest streak in two months, after data showed U.S. jobs and factory orders rose less than forecast and investors weighed the U.S. Federal Reserve’s stimulus plans.
BCE Inc. dropped 1.3 percent to a February low, after Macquarie Group Ltd. said that phone shares are vulnerable amid increased regulation. Canadian Pacific Railway Ltd. lost 4.4 percent to extend losses to a fourth day after its largest shareholder said it will sell part of its stake. WestJet Airlines Ltd. slid 2.3 percent after a measure of customers on its flights declined. A gauge of real estate investment trust fell for a seventh day, the longest streak in three years.
The Standard & Poor’s/TSX Composite Index fell 1.2 percent to 12,443.65 at 4 p.m. in Toronto. The index has lost 2.4 percent in the past four days and closed at a one-month low. Trading volume was 13 percent higher than the 30-day average.
“The market in the U.S. and Canada is pausing here, it’s run out of momentum,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. He helps manage about C$1 billion ($966 million). “The economic numbers, some of them have been disappointing, to put it mildly. There seems to be a difference of opinion among Fed members. When they have a problem, the market has a problem.”
Federal Reserve Bank of Dallas President Richard Fisher, among the most vocal critics of additional easing, and Fed Bank of Kansas City President Esther George, who has dissented against record stimulus at every policy meeting this year, separately called for a reduction in the central bank’s $85 billion in monthly bond purchases yesterday. Atlanta Fed President Dennis Lockhart said earlier this week that “very mixed” economic data makes him “more cautious” about a near-term reduction.
The 135,000 increase in U.S. employment in May followed a revised 113,000 gain in April that was smaller than initially estimated, the ADP Research Institute reported today. The median forecast of 40 economists surveyed by Bloomberg called for a May advance of 165,000.
All 10 groups in the S&P/TSX retreated, led by industrial stocks, which sank 2.6 percent as a group for the biggest slide since September. U.S. factory orders rose 1 percent in April as demand for non-durable goods dropped. The median forecast among economists surveyed by Bloomberg was for a 1.5 percent increase.
Canadian Pacific slid 4.4 percent to C$126. William Ackman’s Pershing Square Capital Management LP said on June 3 it plans to sell as many as 7 million shares of the company beginning June 10.
The New York hedge fund instigated a turnaround at the company after installing Hunter Harrison as the new chief executive officer last year. The stock has fallen 9.3 percent in the past four days.
Chartwell Retirement Residences sank 2.6 percent to C$10.33 and Allied Properties Real Estate Investment Trust declined 0.8 percent to C$31.89. The S&P/TSX Capped REIT Index has fallen seven straight days, dropping 6.4 percent during its longest losing streak since February 2010.
WestJet Airlines lost 2.3 percent to C$22.18. The company’s passenger load factor, which measures the percentage of seats filled on flights, declined to 78.5 percent in May from 79.2 percent a year earlier.
BCE retreated 1.3 percent to C$45.57. The stock has fallen in six of the past seven days, slipping 5 percent in that time. Canadian regulators yesterday squashed a proposed deal between Telus Corp. and Mobilicity due to competition concerns, and regulators have introduced a code of conduct allowing consumers to break contracts after two years with no penalty.
Greg MacDonald, analyst with Macquarie Group, said in a note today telecommunications stocks will continue to fall through the summer due to the recent regulatory reforms, including a delay of the next wireless spectrum auction until 2014.
Telus decreased 1.9 percent to C$35.14 and Rogers Communications Inc., Canada’s largest wireless carrier, fell 1.4 percent to C$45.78.