Canadian Stocks Decline on Bank Earnings, Central Bank Comments

  • Global equities slip as ECB stimulus measures disappoint
  • Toronto-Dominion, CIBC retreat after fourth-quarter earnings

Canadian stocks fell to a two-week low, as Europe’s central bank sparked a rout in risk assets after the scale of additional stimulus disappointed.

Global markets slipped as some investors were disappointed by the extent of the European Central Bank’s latest moves at the same time Federal Reserve Chair Janet Yellen reiterated that tightening is imminent.

“The market is still nervous,” said David Cockfield, fund manager at Northland Wealth Management in Toronto. His firm manages about C$325 million. “I’d say because the market is so unpredictable we’ve been kind of edging into and out of things. You just try to keep your head down.”

The Standard & Poor’s/TSX Composite Index fell 139.15 points, or 1 percent, to 13,324.67 at 4 p.m. in Toronto, after sliding 1.3 percent yesterday for the biggest loss since Nov. 12. The benchmark equity gauge has dropped 8.9 percent this year, trailed only by Singapore and Greece among developed markets.

Canada’s banks paced declines. Toronto-Dominion Bank, the nation’s largest lender, lost 1.3 percent as higher earnings offset C$243 million ($183 million) in restructuring costs related to job cuts. Canadian Imperial Bank of Commerce fell 2.2 percent, the most in three months, after net income slid.

A gauge of developed and developing equity markets lost 0.7 percent, to a Nov. 17 low, as the S&P 500 slumped 1.4 percent for the biggest decline in more than two months.

Canadian energy and raw-materials producers, which account for about 30 percent of the nation’s benchmark index, have each slumped more than 21 percent this year and are the second and third worst-performing industries in the S&P/TSX ahead of health-care stocks.

A combination of slowing economic growth in China, concerns about the economic health of European nations and a rally in the U.S. dollar with impending interest-rate increases from the Fed as soon as Dec. 16 have crimped commodities prices this year.

Barrick Gold Corp. and Goldcorp Inc. increased at least 1.9 percent as raw-materials producers gained 0.5 percent as a group. Gold futures for February delivery rose 0.7 percent, rebounding from a February 2010 low.

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