Trader James Dresch work on the floor of the New York Stock Exchange Nov. 10.Richard Drew/The Associated Press
Canadian stocks fell a sixth day on Wednesday, the longest stretch since the summer rout, as weak industrial data from China and increased stockpiles in the U.S. sent commodities lower.
Signs of slowing industrial growth in the world's second- largest economy continue to weigh on resources from oil to zinc and copper. Materials and energy producers in the Canadian benchmark have lost more than 5 per cent in the past six sessions, failing to hold a rebound from an August selloff.
The Standard & Poor's/TSX Composite Index fell 69.70 points, or 0.52 per cent, to 13,341.93 in Toronto. The benchmark equity gauge has lost 2.6 per cent in six days, the longest losing streak since Aug. 24.
The energy sector slipped 3.47 per cent to lead losses Wednesday. Oil closed at the lowest level in more than two-months as U.S. industry data showed crude supplies expanded for the world's biggest consumer, compounding a global surplus.
West Texas Intermediate futures dropped 2.9 per cent as inventories increased by 6.3 million barrels last week, the American Petroleum Institute was said to report Tuesday.
Oil has slid about 45 per cent the past year amid signs the global glut will be prolonged and the Organization of Petroleum Exporting Countries continues to pump above its target. WTI has traded between $42 (U.S.) and $51 since August when it touched a six- year low of $37.75. The EIA boosted its estimate for U.S. output in 2015, while Iraq has loaded as many as 10 tankers in recent weeks to deliver crude to American ports.
"The API numbers caught everyone by surprise, because the blockbuster numbers were thought to be over," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. "We've been in a range for a while and now seem poised to break through to the downside after making several attempts to break higher."
WTI for December delivery fell $1.28 to close at $42.93 a barrel on the New York Mercantile Exchange. It was the lowest settlement since Aug. 27. The contract touched $42.62, the lowest intraday level since Oct. 27. The volume of all futures traded was 26 per cent above the 100-day average.
Brent for December settlement declined $1.63, or 3.4 per cent, to end the session at $45.81 a barrel on the London- based ICE Futures Europe exchange. It was the lowest close since Aug. 26. The European benchmark crude was at a $2.88 premium to WTI.
Energy producers account for about 19 per cent of the S&P/TSX.
Suncor Energy Inc lost 2.35 per cent, and Canadian Natural Resources Ltd gave back 2.34 per cent. Meanwhile, Painted Pony Petroleum Ltd rose 6.54 per cent.
Miners also retreated, adding to a weeklong slide, as China's industrial output in October matched the weakest since 2008. China, one of the world's largest consumers of natural resources, is Canada's second-largest trading partner after the U.S.
First Quantum Minerals fell 8.37 per cent, while HudBay Minerals Inc dropped 8.03 per cent.
Canadian equities have lagged most peers, led by declines in natural resource and health-care stocks, as the country's resource-dominated market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest- rate hike from the Federal Reserve. The S&P/TSX has lost 8.7 per cent this year, trailing only Singapore and Greece among developed markets.
Valeant Pharmaceuticals International Inc. slipped 5.51 per cent for a second day of losses. Debt investors are growing concerned disruptions to Valeant's cash flow will lead to a squeeze in the company's debt. The drugmaker said in a conference call Tuesday that the decision to cut ties with pharmacy Philidor Rx Services would meaningfully affect its dermatology business. Valeant has lost almosy 70 per cent from an Aug. 5 high amid pressure over how it prices its drugs.
In the financial services sector, Element Financial rose 8.76 per cent.
Other market movers included: Amaya, which fell 7.16 per cent, and Thomson Reuters, which rose 2 per cent.
U.S. stocks slipped in quiet trading during the Veterans Day holiday, with merger news and a selloff in retail shares sparked by results from Macy's Inc. capturing the spotlight.
Macy's slumped the most in more than six years following a cut in its profit forecast, turning the tables on retailers after they ranked among Tuesday's leaders. Apache Corp. tumbled more than 7 per cent after rebuffing a buyout offer from Anadarko Petroleum Corp. Molson Coors Brewing Co. rallied as it stands to benefit from the mega-merger between Anheuser-Busch InBev NV and and SABMiller Plc.
The Standard & Poor's 500 Index fell 0.3 per cent to 2,074.93 in New York, after swinging between gains and losses.
"We're coming into the end of earnings season," said James Gaul, a portfolio manager at Boston Advisors LLC, which oversees $2.8-billion. "There's a lot of news behind us and not a lot of potentially market-moving news ahead of us in the short term. It seems like it's going to be quiet because there aren't a whole lot of obvious catalysts right now. Today might just be a little bit of a digestion day."
The S&P 500 has rebounded more than 11 per cent after its first correction in four years, and came within 1 percent last week of a record reached in May. A measure of market volatility had its biggest drop ever in October, with equities posting their strongest month since 2011 as central banks worldwide pledged to support growth.
Markets have since levelled off as investors assess the potential impact of interest rates that could be higher in the U.S. as soon as next month. Traders are now pricing in a 68-per-cent chance of a rate increase at the Federal Reserve's next meeting in December, up from 56 percent a week ago before a stronger-than-expected October jobs report.
"Rate expectations for December have ticked up quite a bit," said Veronika Pechlaner, an investment manager based in Jersey, the Channel Islands, who helps oversee $10-billion at Ashburton Investments, part of FirstRand Group. "After the initial weakness following the payroll print, the market is taking it in its stride, and that's good news. It's going to be a wait-and-see development for the market where the positive seasonal trend is fighting with specific action around rates."
As the earnings season draws to a close, 74 percent of S&P 500 members that have reported beat profit expectations, while only 44 per cent topped sales projections. Analysts now predict a 3.8-per-cent drop in profits for companies in the index, an improvement on estimates for a 7.2-per-cent slide at the start of the season. Cisco Systems Inc., Nordstrom Inc., Kohl's Corp. and Viacom Inc. are among companies scheduled to report on Thursday.
While investors sift for clues on the health of the economy, Macy's Inc.'s earnings report did little to inspire optimism in consumers' willingness to spend. Revenue at the the largest U.S. department-store company fell the most since 2010, which the retailer blamed on warm weather and weak traffic trends.