- Bank of Montreal trims gain despite profit topping estimates
- Valeant shares advance as drugmaker says to restate earnings
Canadian stocks erased their gains and ended lower as a selloff in energy companies overshadowed a rebound in Valeant Pharmaceuticals International Inc.
The Standard & Poor’s/TSX Composite Index lost 0.6 percent to 12,763.44 at 4 p.m. in Toronto. The benchmark gauge rallied as much as 0.9 percent before a rout in crude led to plunging energy stocks.
The S&P/TSX has outpaced equities across the developed world this year, topping returns from markets in the U.S., U.K. and Germany and is less than 2 percent away from wiping out declines for the year. The MSCI World Index of developed-nation markets is down 7.4 percent in 2016. While raw-material stocks have performed the best in the Canadian equity index this year, the resource-rich gauge has been whipsawed by swings in oil and commodity prices.
Energy producers sank 2.7 percent as five of 10 industries in the S&P/TSX retreated on trading volume 8.4 percent lower than the 30-day average. Shares in the benchmark gauge currently trade at almost 20 times earnings, about 1.1 times more expensive than S&P 500 shares, according to data compiled by Bloomberg.
Oil fell 4.6 percent in New York, slipping from a two-week high. Saudi Arabian Oil Minister Ali al-Naimi, speaking at the IHS CERAWeek oil conference in Houston, said his country isn’t cutting output. Saudi Arabia agreed with Russia last week to freeze output on the condition other major producers, notably Iran and Iraq, follow suit.
Iran’s oil minister earlier called the proposal “ridiculous” as it puts unrealistic demands on the country, according to the ministry’s news agency Shana. Saudi Arabia, Russia, Venezuela and Qatar reached a preliminary agreement in Doha last week to freeze output at January levels. Oil is still down about 14 percent this year.
Valeant Pharmaceuticals International Inc. rebounded 5 percent for the first increase in four days. The company had tumbled 20 percent during its three-day slide. Valeant will restate some of its past earnings after a board committee reviewed the drugmaker’s relationship with mail-order pharmacy Philidor. Valeant didn’t rule out further disclosures. The company plans to hold a call to discuss fourth-quarter results on Feb. 29.
Valeant, briefly the largest company in the S&P/TSX by market capitalization last year before the stock plunged amid scrutiny over its pricing practices, slumped last week after analysts at Wells Fargo Securities initiated coverage with an underperform rating, the equivalent of a sell, on Feb. 19.
Bank of Montreal slipped 0.2 percent, erasing a gain after reporting first-quarter earnings that were ahead of analysts’ estimates Tuesday. Profit was boosted by contributions from its purchase of General Electric Co.’s transportation-finance business. It’s among the first of the nation’s largest lenders to report results this week. National Bank of Canada lost 2.3 percent as profit declined after writing off C$164 million on its investment in Maple Financial Group Inc.