- S&P/TSX stumbles to start second quarter as commodities fall
- Valeant rebounds from 2011 low as internal review completes
Canadian stocks slipped a fourth day, the longest losing streak in almost two months, as crude traded near a one-month low and data showed exports posted their biggest fall since the recession.
The Standard & Poor’s/TSX Composite Index fell 0.2 percent to 13,304.66 at 4 p.m. in Toronto, extending the longest stretch of declines since February 11. While the Canadian benchmark equity gauge has lost 1.5 percent in that time, it’s still up 2.3 percent this year and remains one of the best-performing developed markets in the world. Trading volume was 32 percent lower than the 30-day average.
Canadian exports in February fell 5.4 percent, the biggest drop since May 2009 after rising to a record in January. Canada’s trade deficit widened to twice what economists forecast. Non-energy exports fell 4.2 percent, a blow to the Bank of Canada’s narrative that those industries will drive the country’s economic recovery in coming years.
The S&P/TSX has stumbled out of the gates in the second quarter amid a retreat in commodities, especially crude, in a reversal from the first quarter’s resource-fueled rally. The broader S&P/TSX’s valuation has slipped from last month’s high of 21.9 times reported earnings to 21.1 times. That’s still 13 percent more expensive than the 18.6 times multiple of the Standard & Poor’s 500 Index, data compiled by Bloomberg show.
Crude rose 0.5 percent in New York, erasing losses to rebound from a one-month low, after tumbling 6.9 percent in the previous two sessions. The rally in crude has lost momentum amid speculation whether major OPEC producers will be able to reach an output freeze agreement. Kuwait’s OPEC governor said producers can still come to an agreement without the participation of Iran.
Financial services stocks and energy producers fell more than 0.5 percent to contribute the most to Tuesday’s declines. Raw-materials companies climbed 1.9 percent as a group, with gold producers advancing the most in a week. Barrick Gold Corp. and Kinross Gold Corp. added at least 4.7 percent.
Valeant Pharmaceuticals International Inc. surged 10 percent, rebounding from a five-year low. The drugmaker said a special “ad hoc” board committee found no additional accounting issues that would require more restatements and the company plans to file its annual report on or before April 29.
Valeant is facing push back from some of its lenders as it seeks to waive a default and loosen restrictions on its debt, according to people with knowledge of the matter. The company has been seeking relief from a technical default that arose when it didn’t file its 10-K before March 15.
Hudson’s Bay Co. dropped 2.9 percent after reporting fourth-quarter earnings short of analysts’ estimates. The retailer also boosted its sales forecast range for the year, predicting C$14.9 billion to C$15.9 billion, compared a previous C$14.2 billion to C$15.2 billion estimate.