The Toronto stock market was lower Friday as traders avoided risk going into the weekend amid the possibility of a U.S. government shutdown and BlackBerry turned in a huge quarterly loss and dismal sales figures as expected.
The S&P/TSX composite index shed 14.67 points to 12,826.95.
BlackBerry lost $965-million (U.S.) in the second quarter as revenue plunged 49 per cent from the previous quarter and 45 per cent from a year earlier to $1.6-billion, amid dismal sales of its new smartphones. However, the results were in line with company estimates issued last week when BlackBerry announced 4,500 jobs will be cut from its global work force.
BlackBerry shares gained two cents to $8.24 on the Toronto Stock Exchange while in the U.S., BlackBerry shares added six cents to $8.01 on the Nasdaq market.
The Canadian dollar turned higher amid rising oil prices, up 0.13 of a cent at 97.09 cents U.S. amid skepticism going into the weekend that Congress can pass a funding bill to keep the federal government operating after Oct. 1, when its new fiscal year starts. Also, the U.S. borrowing limit needs to be raised before Oct. 17.
Conservative Republicans are insisting that the shutdown bill and a separate debt limit measure present an opportunity to demolish the Affordable Care Act, otherwise known as Obamacare, and slash spending.
“They can’t afford to mess around on this,” said Wes Mills, chief investment officer Scotia Asset Management PM Advisor Services.
“They’re digging in their heels because they’re tying the Obamacare passage to the debt ceiling. And ultimately if they push too hard on that it’s going to rattle markets big time.”
U.S. indexes were deep in the red as investors digested a report showing higher consumer spending and income growth during August — and other data showing slowing consumer confidence in the United States.
The Dow Jones industrials dropped 97.52 points to 15,230.78, the Nasdaq was 7.72 points lower to 3,779.71 and the S&P 500 index was down 9.25 points to 1,689.42.
The Commerce Department says consumer spending rose 0.3 per cent in August. That’s up from a 0.2 per cent gain in July. Income rose 0.4 per cent in August, the best gain since February and up from a 0.2 per cent July increase.
The spending and income data is closely watched because consumer spending drives 70 per cent of U.S. economic activity.
The final read of the September University of Michigan’s consumer confidence index came in at 77.5, lower than the 78 reading that had been expected.
The TSX benefited from a one per cent rise in the gold sector as nervousness about the U.S. budget fight sent December bullion up $14.20 to $1,338.30 (U.S.) an ounce. Barrick Gold rose 22 cents to C$19.30.
The energy sector was slightly lower with the November crude contract on the New York Mercantile Exchange up 59 cents to $103.62 (U.S.) a barrel. Cenovus Energy was down 22 cents to $30.90.
The base metals sector was the biggest decliner, down 1.5 per cent while December copper on the Nymex was ahead two cents to $3.33 (U.S.) a pound. Teck Resources declined $1.21 to C$28.08.
Telecoms were also a major weight with Telus Corp. down 45 cents to $34.49.
In other corporate news, J.C. Penney, the struggling retailer that is trying to reassure the market about its financial stability, expects to raise about $810.6-million (U.S.) via a public stock offering. J.C. Penney plans to offer 84 million shares priced at $9.65 per share. That is a 7.3 per cent discount to Thursday’s closing price of $10.42 per share. Its stock dropped nine per cent to $9.48 in New York.
European bourses were generally lower going into the weekend with London’s FTSE 100 down 0.89 per cent, Frankfurt’s DAX lost 0.07 per cent while the Paris CAC 40 edged 0.06 per cent higher.