The Toronto stock market moved lower Thursday as oil prices fell sharply for a third day while U.S. jobless insurance claims data added to worries about a slowing economic revival.
The S&P/TSX composite index lost 41.6 points to 11,440.6 while the TSX Venture Exchange dipped 0.89 of a point to 1,440.53.
The Canadian dollar moved lower, down 0.12 of a US cent to 95.55 cents US.
The negative showing followed a selloff on North American markets on Wednesday after the Federal Reserve lowered its assessment of the American economic recovery. Investors were also dismayed by data showing a slowdown in the Chinese economy during the second quarter.
The TSX tumbled 256 points while the Dow Industrials fell 265 points.
Pessimism deepened Thursday on further indications of U.S. job losses.
The Labor Department said that new applications for unemployment insurance rose last week to their highest level in almost six months, a sign that employers are still cutting their staffs.
First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000. Analysts had expected a drop.
The four-week average, which smoothes volatility, soared by 14,250 to 473,500, also the highest since late February.
The TSX energy sector dropped 1.24 per cent as oil prices moved lower despite data on Wednesday showing a draw in U.S. crude oil stocks last week.
Analysts said the figures could not be taken at face value.
“This week’s (Department of Energy) report did nothing to change the perception that oil is a commodity in abundant supply that has only rallied recently on the back of gains in the euro, the stock market or both,” said a release from U.S energy consultancy Cameron Hanover.
“Crude oil stocks fell, but they have been at their highest levels for the end of July in years.”
A stronger U.S. dollar helped push the September crude contract on the New York Mercantile Exchange down $1.73 to US$76.29 a barrel. Crude has fallen more than five per cent this week. Canadian Natural Resources (TSX:CNQ) lost 57 cents to $34.14.
Suncor Energy Inc. (TSX:SU) shares were down 31 cents to $33.04 as it agreed to sell some natural gas assets to Direct Energy for approximately $375 million. The Wildcat Hills properties, near Cochrane, Alta., produce about 80 million cubic feet of natural gas and natural gas equivalent per day.
The September copper contract on the Nymex was unchanged at US$3.26 a pound and the base metals sector lost 1.7 per cent. Teck Resources (TSX:TCK.B) was down 34 cents to $34.27 and Quadra FNX Mining (TSX:QUX) declined 70 cents to $10.85.
The TSX gold component was the strongest advancer, ahead 1.6 per cent as December gold gained $15.60 to US$1,214.80 an ounce. Barrick Gold Corp. (TSX:ABX) advanced 78 cents to $45.07.
Cisco Systems added to investors’ anxiety by reporting revenue figures that fell short of forecasts. After the market close, investors took in news that Cisco Systems Inc.’s revenue from its latest quarter and its forecast for future revenue both fell short of analysts’ expectations. The company’s stock fell $2.59 or almost 11 per cent to US$21.14 in New York.
The Toronto tech sector fell back 1.54 per cent as Research In Motion Ltd. (TSX:RIM) fell $1.56 to $57.22.
The drop in share price came after the Indian government said it will shut down BlackBerry email and instant messaging services by Aug. 31 if RIM does not address Indian security concerns.
Several countries including the United Arab Emirates and Saudi Arabia have all expressed concerns about not having access to BlackBerry users’ data.
New York markets also added to losses with the Dow Jones industrials down 73.3 points to 10,305.6.
The Nasdaq composite index fell 31.6 points to 2,177.03 while the S&P 500 index was 9.8 points lower to 1,079.65.
On the earnings front, Tim Hortons Inc. (TSX:THI) shares rose 37 cents to $35.81 as the coffee chain reported second-quarter profits rose 21 per cent to $94.1 million. Revenues increased 5.7 per cent to $639.9 million. The company also said it will sell its 50 per cent interest in Maidstone Bakeries to its joint venture partner for $475 million.
Canadian Tire Corp. (TSX:CTC.A) reported that second quarter net earnings rose 15.6 per cent to $119.9 million from $103.7 million. Operating revenue improved slightly, rising 3.8 per cent to $2.41 billion. Total retail sales in the second quarter increased 1.3 per cent and same store sales were up 0.8 per cent and Canadian Tire shares were down 48 cents to $55.25.
T-shirt maker Gildan Activewear Inc. (TSX:GIL) says higher sales of its clothing drove profits higher in the third quarter. The Montreal-headquartered company, which reports in U.S. dollars, earned US$64.7 million or 53 cents per share, up from $41.5 million or 34 cents per share a year ago. The T-shirt, sock and clothing producer says overall sales rose to $395.3 million from $307.8 million and its share declined $1.25 to $30.25.
And General Motors Co. said Thursday it made US$1.33 billion in the second quarter, a sign of growing strength as the company prepares to sell stock to the public. It is GM’s second straight quarterly profit. The company made $865 million in the first quarter. No date has been set for the stock sale.
In overseas trading, Japan’s benchmark Nikkei 225 stock average closed down 0.9 per cent and Hong Kong’s Hang Seng retreated 0.9 per cent. The Shanghai Composite Index dropped 0.7 per cent.
London’s FTSE 100 index was off 0.32 per cent, Frankfurt’s DAX lost 0.52 per cent while the Paris CAC40 was down 1.05 per cent.
