Traders work on the floor of the New York Stock Exchange (NYSE) in New York on Monday, May 2.Michael Nagle/Bloomberg
Canadian stocks fell in the first trading session of May, after capping a third monthly gain, as energy producers declined with oil and Bank of Nova Scotia slipped after reporting a $275-million restructuring charge.
The benchmark S&P/TSX Composite Index fell 0.62 per cent, or 85.82 points, to 13,865.63 in Toronto. The gauge increased 3.4 per cent in April, matching the longest monthly winning streak since August 2014. The S&P/TSX is one of the best-performing developed markets in the world this year as it rebounds from last year's worst annual decline since 2008.
Suncor Energy Inc. and Cenovus Energy Inc. fell at least 3.1 per cent to lead energy producers lower as six of 10 industries in the S&P/TSX retreated.
Crude futures sank in New York, extending a slide from Friday. Exports from Iraq approached a record in April, shipping 3.36 million barrels a day in the month to add to a worldwide supply glut, according to an oil ministry spokesman. The figures don't include sales by the Kurdistan Regional Government.
The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, with an 17-per-cent rally in the benchmark equity gauge from a Jan. 20 low aligning with a rebound in crude from the lowest levels since 2003. Raw-materials and energy producers are the two top-performing industries in Canada so far this year, up more than 12 per cent.
The Canadian benchmark now trades at 21.5 times earnings, about 12 per cent higher than the 19.2 times earnings valuation of the Standard & Poor's 500 Index, according to data compiled by Bloomberg.
Scotiabank lost 0.96 per cent after reporting it will take a charge of 22 cents a share in its fiscal second quarter, to cover the cost of job cuts and other productivity enhancements as it shifts toward digital banking. The bank is scheduled to report results May 31.
Manitoba Telecom Services Inc. climbed a record 15.26 per cent to the highest since 2008, after agreeing to sell itself to BCE Inc. in a $3.1-billion cash and stock deal. Manitoba Telecom traded at a lower value than the $40 a share acquisition price. As a follow-on to the deal, BCE will also transfer one-third of Manitoba Telecom's wireless subscribers to competitor Telus Corp. BCE fell 0.39 per cent while Telus gained 0.13 per cent.
Valeant Pharmaceuticals International Inc. sank 2.3 per cent for a third day of losses in the last four. Warren Buffett criticized Valeant at Berkshire Hathaway Inc.'s annual meeting, calling the drugmaker's business model "enormously flawed."
U.S. stocks rose on Monday, rebounding from losses last week, as financials gained with Berkshire Hathaway and weakness in the dollar eased worries about earnings for multinationals.
The Dow Jones industrial average rose 117.52 points, or 0.66 per cent, to 17,891.16, the S&P 500 gained 16.09 points, or 0.78 per cent, to 2,081.39 and the Nasdaq Composite added 42.24 points, or 0.88 per cent, to 4,817.59.
Gains in consumer discretionary and staples shares also lifted stocks, which on Friday posted their largest weekly drop in more than two months.
"What we're seeing now is the market bouncing back after selling off on disappointment on the central bank front late last week," said Adam Sarhan, chief executive of Sarhan Capital in New York.
"You also have some healthy sector rotation occurring," he said, mostly out of commodity-related stocks.
Recovering oil prices and an accommodative Federal Reserve have helped the S&P 500 rise 15 per cent since February - about 3 per cent short of its all-time high. However on Thursday, the Bank of Japan's call to not increase monetary stimulus rattled investors.
Oil declined for a second day as Iraq's exports approached a record high in April, adding barrels to a worldwide supply glut that has pushed prices lower.
Futures settled below $45 a barrel in New York after rallying to a five-month high last week. Iraq, excluding sales by the Kurdistan Regional Government, shipped 3.36 million barrels a day last month, an oil ministry spokesman said by text message Sunday. Exports neared the November record-high of 3.365 million barrels a day. Protests that included the storming of parliament in Baghdad broke up Sunday without affecting crude production, even as the political turmoil threatens to paralyze the government of OPEC's second-largest producer.
Oil has rebounded after tumbling this year to the lowest since 2003 as U.S. production dropped below 9 million barrels a day. OPEC crude production surged in April, led by Iran, which is seeking to regain market share after sanctions were lifted early this year.
"We have probably seen the worst of it in oil -- that's the good news. The bad news is that the current price has just gotten ahead of itself," said Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $3.6 billion. "It appears that OPEC is trying to absorb all of the production loss that the U.S. is going to bring."
West Texas Intermediate for June delivery fell $1.14, or 2.5 per cent, to settle at $44.78 a barrel on the New York Mercantile Exchange.
Brent for July settlement declined by $1.54, or 3.3 per cent, to end the session at $45.83 a barrel on the London-based ICE Futures Europe exchange. The global benchmark was at a 35-cent premium to WTI for July.
With files from Reuters