The Toronto stock market was lower Thursday as data showed worsening economic conditions in Europe and big losses and writedowns in the Canadian gold sector.
The S&P/TSX composite index fell 30.46 points to 12,744.82 while the TSX Venture Exchange was down five points to 1,199.28.
The Canadian dollar inched up 0.02 of a cent to 99.84 cents (U.S.)
Barrick Gold Corp. is cutting or delaying $4-billion (U.S.) in previously budgeted capital spending and writing down the value of its copper business unit by $4.2-billion after taxes. Toronto-based Barrick made the announcement as it posted a $3.06-billion net loss in the fourth quarter and its shares gained 79 cents to $32.51.
U.S. indexes were also in the red after Eurostat, the EU’s statistics office, said Thursday the euro zone economy shrank by 0.6 per cent in the final quarter of 2012 from the previous three-month period. The decline was bigger than the 0.4 per cent drop expected in markets and represented the biggest fall since the first quarter of 2009 when the global economy was in its deepest recession since the Second World War.
The euro zone has now contracted for three straight quarters, weighed down by weak, debt-laden countries such as Greece and Spain, where governments have been aggressively increasing taxes and cutting spending.
Especially worrisome was worsening conditions in Europe’s biggest economy. The German economy shrank by a quarterly rate of 0.6 per cent in the fourth quarter as demand for its exports fell.
The Dow Jones industrials fell 15.47 points to 13,967.44, the Nasdaq composite index was down 7.5 points to 3,189.37, while the S&P 500 lost 2.03 points to 1,518.3.
There was also major acquisition activity in the U.S. Warren Buffet’s Berkshire Hathaway and investment company 3G are buying food giant Heinz in a deal valued at $23.3-billion (U.S.), excluding debt. Heinz shareholders will receive $72.50 in cash for each share of common stock they own, a 20 per cent premium to Heinz’s closing price of $60.48 on Wednesday.
Losses were led by the tech sector on the TSX.
James Balsillie, the former co-CEO and co-founder of Research in Motion, now called BlackBerry, disclosed Thursday that he owns no stake in the company. BlackBerry shares fell 40 cents or 2.86 per cent to $13.60 (Canadian), a day after dropping more than eight per cent as the sheen continued to wear off from the company’s smartphone product launch two weeks ago.
The energy sector was down 0.7 per cent as the March crude contract on the New York Mercantile Exchange gained 39 cents to $97.40 (U.S.) a barrel.
Cenovus Energy, which posted a net loss of $118-million or 16 cents per share, a big turnaround from the year-earlier profit of $266-million or 35 cents per share. Cash flow fell to $697-million or 92 cents per share, down from $851-million or $1.12 per share. The company’s chief executive said last month that the low price that Alberta producers can get for their oil, relative to other types of crude including West Texas Intermediate, is causing a major problem for the industry and Canada. Cenovus shares declined 20 cents to $32.40.
The gold sector was the leading advancer, up one per cent as April bullion gained $2.70 to $1,647.80 (U.S.) an ounce.
Kinross Gold Corp. reported a quarterly net loss of $2.99-billion, or $2.62 per share, compared to a net loss of $2.79-billion, or $2.45 per share in the year earlier period. On an adjusted basis, Kinross reported net earnings of $276.5-million, or 24 cents per share, which beat analyst estimates by a penny and its shares gained 38 cents to $8.29.
Revenue for the quarter came in at $1.186-billion, less than the $1.23-billion that analysts had expected. The miner also cut its capital expenditures for 2013 compared to 2012.
The base metals sector was flat as copper for March on the Nymex was unchanged at $3.74 (U.S.) a pound.
In other earnings news, on Wednesday after the markets closed, Sun Life Financial reported quarterly earnings of $395-million, or 65 cents per share, compared to a loss of $525-million, or 90 cents per share, a year ago. Operating earnings, which excludes items that the company believes are not ongoing, came in at 76 cents per share, outdoing analyst expectations of 63 cents per share, according to a poll by Thomson Reuters. Its shares were down 52 cents to $29.48.
RioCan Real Estate Investment Trust is in the process of selling 14 Canadian properties worth about $645-million. The Toronto-based outlet, plaza and shopping mall operator also announced a net profit of $468-million or $1.55 per common unit in the fourth quarter.
That was up from $241-million or 87 cents per unit a year earlier and far above the consensus estimate of 56 cents per unit in net income and its units added seven cents to $27.48.
In the U.S., General Motors said it made $898-million or 54 cents a share in the latest quarter, up from $468-million in 2011. Revenue grew three per cent to $39.3-billion. The fourth-quarter profit included billions in one-time accounting gains and losses that ended up being a $100-million increase. Without it the company earned 48 cents per share. That was short of analyst estimates. They predicted 51 cents.
Revenues were $4.25-billion, which came in short of analyst predictions of $5.95-billion, and GM stock gained 49 cents to $29.16.
Economic data pushed European bourses lower as London’s FTSE 100 index lost 0.63 per cent, the Paris CAC 40 dropped 0.64 per cent while the Frankfurt DAX gave back 1.05 per cent.