NS: Stock markets lower on mixed earnings, sliding oil prices
The Toronto stock market moved lower in early trading Thursday following a four-day winning streak, led by declines in financials and energy stocks.
New York indexes also declined amid mixed earnings news and worse than expected readings on the health of the manufacturing sector. There was relief that the U.S. House of Representatives passed the Obama administration's US$819-billion economic rescue plan.
However, there was unease over the fact that not a single Republican voted in favour of the measure.
Toronto's S&P/TSX composite index dropped 154.1 points to 8,752.1 after running ahead more than 400 points or about five per cent since last Thursday.
The financial sector was particularly supportive, rising almost nine per cent over four sessions following better than expected earnings from British bank Barclays PLC and reports that the U.S. Federal Deposit and Insurance Corp. could be assigned to run a bank that would buy toxic or illiquid assets to help free up the credit market.
The Canadian dollar rose 0.08 cent to 82.37 cents US.
The TSX Venture Exchange dipped 0.35 of a point to 870.27.
New York's Dow Jones industrials lost 99.6 points to 8,275.8 after rising 201 points.
The Nasdaq composite index shed 26.01 points to 1,532.33 while the S&P 500 index gave back 15.65 points to 858.45 as orders to U.S. factories for big-ticket manufactured goods fell by 2.6 per cent in December, an even bigger decline than the two per cent that had been expected.
The U.S. Commerce Department said orders fell 5.7 per cent for the year, the second biggest drop on record, exceeded only by a 10.7 per cent plunge in 2001.
Among earnings reports, Ford Motor Co. said it lost US$5.9 billion in the fourth quarter but has no plans to seek federal aid unless economic conditions worsen. The second-largest U.S. automaker said it reached an agreement with the United Auto Workers Union to end the jobs bank in which laid-off workers get most of their pay. The union has already agreed to do so with General Motors Corp. and Chrysler LLC. Ford shares stepped back four cents to US$1.99.
Consumer products company Colgate-Palmolive said its fourth-quarter earnings rose nearly 20 per cent because of cost cuts, higher prices and new products and its shares ran ahead $1.60 to US$65.41.
Photography pioneer Eastman Kodak Co. said it is cutting 3,500 to 4,500 jobs, or 14 per cent to 18 per cent of its workforce, as it posted a US$137-million fourth-quarter loss on plunging sales of both digital and film-based photography products. Its shares tumbled 89 cents to $6.18.
Starbucks Corp. announced a new round of store closures and layoffs as it reported Wednesday that its profit dropped 69 per cent in its first quarter with sales continuing to slide.
The company plans to close 300 underperforming stores around the world by the end of the financial year, which could result in the loss of 6,000 in-store jobs and its shares eased 20 cents to US$9.45.
The TSX financial sector was down 1.35 per cent energy sector was off per cent as TD Bank (TSX:TD) lost 52 cents to$41.86.
The energy sector was down 1.5 per cent as oil prices dropped amid rising crude inventories and a dismal global economic outlook. The March crude contract on the New York Mercantile Exchange fell $1.74 to US$40.42 after the U.S. Energy Department on Wednesday said commercial crude oil inventories jumped 6.2 million barrels from the previous week, almost twice what was expected.
EnCana Corp. (TSX:ECA) fell $1.28 to US$55.94.
Shares in Petro-Canada (TSX:PCA) were down 79 cents to $27.93 after the energy giant said that its fiscal 2008 profits rose 15 per cent from year-earlier levels despite reporting a $691 million loss in the fourth quarter.
Much of the drop came from a $442 million loss on foreign currency translation of long-term debt, which is denominated in U.S. dollars.
Despite the fourth-quarter results, Petro-Canada said full-year earnings jumped to $3.1 billion, up from 2007 profits of $2.7 billion.
Falling crude oil prices pushed Canadian Oil Sands Trust (TSX:COS.UN) profits down sharply in the fourth quarter, prompting the trust to cut its distributions for the first quarter of 2009 to 15 cents per unit, down from 75 cents. Its units were off 25 cents to $17.15 as it earned $124 million compared with a profit of $515 million a year ago.
The February bullion contract in New York moved down $7.10 to $881.10 an ounce.
Shares in power producer TransAlta Corp. (TSX:TA) were ahead eight cents to $22.78 as it reported that fourth-quarter profits dipped to $94 million from $130 million a year-earlier due to year-earlier income tax gains. Full-year profits fell to $235 million from $309 million due to the writedown of its Mexico business and higher income taxes. It boosted its dividend boosted two cents to 29 cents.
Overseas, Japan's Nikkei stock average rose 1.8 per cent. Britain's FTSE 100 fell two per cent, Germany's DAX index fell 1.15 per cent and France's CAC-40 fell 1.3 per cent.
