Canadian stocks fell a second day, with the benchmark index paring losses in the final hour, as technology companies slumped amid a selloff in U.S. Internet shares and Barrick Gold Corp. sank on failed merger talks.
Avigilon Corp. and Constellation Software Inc. retreated more than 3.4 percent to pace declines among computer shares. Barrick Gold lost 3.1 percent after Newmont Mining Corp. broke off talks to merge the world’s two largest gold producers. Saputo Inc. added 3.5 percent after an analyst at TD Securities Inc. projected increasing fourth-quarter earnings. Capital Power Corp. lost 1.8 percent after analysts at National Bank Financial lowered their rating for the stock. Teck Resources Ltd. retreated 2.3 percent to snap four days of gains.
The Standard & Poor’s/TSX Composite Index fell 2.66 points, or less than 0.1 percent, to 14,530.91 at 4 p.m. in Toronto, paring earlier losses of as much as 0.5 percent. The equity gauge has climbed 1.4 percent in April for a 10th month of gains, the longest streak since 1983.
“There seemed to be an overemphasis in a lot of portfolios last year on the growth segment of the market so that’s caught everybody a little flat-footed,” said Bob Decker, fund manager at Aurion Capital Management Inc. in Toronto. His firm manages about C$6.6 billion ($5.99 billion). “The rotation has been abrupt and caught people by surprise.”
The Nasdaq 100 Index has fallen in four of the past five weeks amid concern earnings growth is too slow to justify equity valuations.
The Obama administration imposed sanctions on seven Russian officials and 17 companies linked to Russian President Vladimir Putin’s inner circle involved in banking, energy and infrastructure. The European Union added 15 names to a list of sanctioned persons.
Avigilon, which manufactures surveillance equipment, sank 4.3 percent to C$24.84, the lowest level since November. Constellation Software retreated 3.4 percent to C$253.03, a seven-week low. The S&P/TSX Information Technology Index slid 0.8 percent, the most since April 11.
Three of 10 industries in the S&P/TSX retreated on trading volume 10 percent lower compared with the 30-day average. Materials producers sank 1.2 percent
Barrick Gold retreated 3.1 percent to C$19.12 after Newmont Mining criticized the company’s Co-Chairman John Thornton as a factor in breaking off discussions to merge the two companies, the latest of several failed attempts over more than two decades.
Newmont Chairman Vincent Calarco said in an April 25 letter to the Barrick board, published today, that Thornton was not constructive during talks and also cited press reports that quoted Barrick Chairman Peter Munk describing Newmont as “not shareholder-friendly.” Newmont slumped 6.7 percent to $24.67 in New York, the most since January.
Teck Resources lost 2.3 percent to C$24.26, the first loss in five days, as copper prices slipped after a four-day rally.
Capital Power declined 1.8 percent to C$24.84, a five-week low. Patrick Kenny, analyst at National Bank Financial, lowered the stock’s rating to sector perform, the equivalent of a hold, as the company’s shares have rallied 22 percent since Oct. 16.
Saputo added 3.5 percent to C$57.52 after Michael Van Aelst, analyst at TD Securities, raised his target price for the stock to C$61 from C$55 on a projected 17 percent increase in fourth-quarter earnings per share. Saputo is scheduled to report results on June 5.
Nautilus Minerals Inc. soared 40 percent to 67 Canadian cents, the highest level since January. Nautilus, which won the first lease to mine the ocean floor for gold and copper, has rallied 191 percent in the past three days after resolving a dispute with Papua New Guinea.