- Valeant plunged most since '93 last week after Citron report
- Energy leads commodities producers lower as oil prices fall
Canadian stocks fell the most in a month, retreating from a two-week high, as oil producers declined and Valeant Pharmaceuticals International Inc. resumed losses.
Energy shares lost 2.4 percent as a group to lead Canadian equities lower as U.S. crude inventories have risen to the highest levels for the season in 85 years. West Texas Intermediate futures for December delivery traded for 92 cents less than January, the widest spread -- also known as contango -- since May.
The Bloomberg Commodity Index, a gauge tracking a basket of commodities prices from oil to copper, slipped 0.6 percent for a fourth day of losses. Prices are on pace for a fourth straight month of losses.
The Standard & Poor’s/TSX Composite Index fell 162.76 points, or 1.2 percent, to 13,790.90 at 4 p.m. in Toronto. The gauge has rallied 3.6 percent in October, on pace for the biggest monthly increase since February.
Commodities producers retreated, led by declines among oil stocks. Crescent Point Energy Corp. dropped 1.8 percent and Encana Corp. retreated 6.9 percent. WTI crude was down 62 cents to $43.98 a barrel in New York, failing to sustain a rally earlier this month to $50 a barrel amid surging U.S. inventories.
Valeant lost 6.4 percent. The stock fell as much as 12 percent before briefly erasing those declines earlier in the day as Chief Executive Officer Michael Pearson shot back at critics in a conference call Monday morning, saying the drugmaker had behaved properly in its relationship with specialty pharmacy Philidor RX Services.
“Our accounting with respect to the company’s Philidor arrangements is fully compliant with the law,” Pearson said in a statement released ahead of the call. “However, other issues have been raised publicly about Philidor’s business practices, and it is appropriate that they be fully reviewed.”
Shares of Laval, Quebec-based Valeant plummeted 32 percent last week, the most since 1993, after short-seller Citron Research said Valeant is using Philidor to store inventory and record those transactions as sales. Valeant has denied the accusations, saying that sales are recorded only when the drugs are sent to patients. Philidor accounted for about 6 percent of Valeant’s revenue for the nine months ended Sept. 30, Valeant said in a filing to the U.S. Securities and Exchange Commission.
Smaller peer Concordia Healthcare Corp. fell 5.4 percent today. Concordia and Valeant were the two best-performing stocks in the S&P/TSX through the first half of the year, fueled by aggressive growth-by-acquisition strategies.