Trader Peter Tuchman, right, works on the floor of the New York Stock Exchange, Wednesday, Nov. 25.Richard Drew/The Associated Press
Canadian stocks were flat on Wednesday as consumer shares advanced and Valeant Pharmaceuticals International Inc. fluctuated through the day.
Consumer-staples companies advanced 1.37 per cent. Alimentation Couche-Tard Inc. added 1.7 per cent, headed for a record close, after the gas-bar and convenience store retailer raised its dividend and posted second-quarter earnings ahead of estimates Tuesday.
The Standard & Poor's/TSX Composite Index fell 4.41 points, or 0.03 per cent, to 13,403.42 in Toronto. The index has pared declines for the year to 8 per cent, trailed only by Singapore and Greece among developed markets.
Valeant fell 0.87 per cent, erasing losses of as much as 5 per cent and rising as high as 2.79 per cent before ending down. The shares plunged in early trading after Sydney-based Bronte Capital in a blog posting identified 78 pharmacies with names alluding to chess moves or to Stephen King novels it claims are probably tied to the drugmaker. The hedge fund has a short- selling position against Valeant that would let it profit on the stock's decline, the company confirmed in an e-mail.
Briefly the largest company in Canada by market capitalization this year, Valeant has plunged 66 per cent from an Aug. 5 all-time high amid scrutiny over its drug pricing practices and relationship with mail-order pharmacies such as Philidor RX Services, first highlighted by short-seller Andrew Left's Citron Research.
Activist investor Bill Ackman has been a staunch backer of the company, increasing his fund's stake in Valeant to 9.9 per cent, from 5.7 per cent as of Sept. 30, in a series of transactions starting in October, according to a Monday regulatory filing. Ackman also defended Valeant at length in a marathon conference call Oct. 30.
Oil producers were little changed as oil fluctuated after a government report showed that U.S. crude, gasoline and distillate fuel stockpiles increased. West Texas Intermediate futures rose 0.09 per cent.
Energy and raw-materials producers, along with health-care stocks, have fallen at least 21 per cent this year to lead declines in the S&P/TSX. A combination of slowing economic growth in China and a rally in the U.S. dollar due to impending interest-rate increases from the Federal Reserve as soon as December have crimped commodities prices.
Bombardier Inc. rose the most in almost a month amid optimism that the new executive team will deliver on a plan to boost earnings at the struggling plane- and trainmaker in the next five years.
"People like the management," David Tyerman, a Canaccord Genuity analyst, said in a telephone interview Wednesday. "This management team gives a ton more information than the previous team. At least we have an idea of where we are going."
The stock rally followed an investor presentation that was the first since Bombardier secured $2.5 billion in investments from the government of Quebec and the province's public pension fund manager. Including Chief Executive Officer Bellemare, six of the eight senior leaders who appeared Tuesday weren't with the company when the year began.
Bombardier's widely traded Class B shares climbed 11.86 per cent to $1.32. The stock jumped as much as 15 per cent, the most in intraday trading since Oct. 28.
U.S. stocks closed little changed in light pre-holiday trading, with equities hovering near three-week highs as investors weighed mixed economic data and weakness in commodities.
The Standard & Poor's 500 Index roamed in a narrow range for a third day, following the index's strongest week this year. Declines in energy and raw-materials shares were offset as Pfizer Inc. climbed 2.8 per cent to lead health-care companies higher. Macy's Inc. gained 1.9 per cent to pace an increase among a group of retailers, which rose for the seventh time in eight days.
The S&P 500 fell less than 0.1 percent to 2,088.92 in New York, with the gauge holding in its tightest intra-day range in six months. The Dow Jones industrial average rose 1.47 points, or 0.01 per cent, to 17,813.66, while the Nasdaq Composite added 13.34 points, or 0.26 per cent, to 5,116.14.
This was the week's final full trading session as U.S. markets will be closed Thursday in observance of the Thanksgiving Day holiday, and equity markets close at 1 p.m. on Friday.
"The economic numbers today basically confirm what we've seen -- a moderate expansion," said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management, which oversees $27-billion. "It's a typical mixed bag of economic news. Markets continue to be focused not just on the Fed, but global central bank policy, with the ECB meeting coming up next week."
A report Wednesday showed orders for U.S. business equipment climbed more than forecast in October, indicating steady domestic demand is encouraging corporate investment even as global sales waver. Separate data showed household spending rose less than forecast in October, while income gains accelerated.
Data Wednesday also showed consumer confidence rose less than expected in November, while purchases of new homes rebounded in October from a 14-month low. Order backlogs reached an eight-year high, indicating a pickup in residential construction.
Other recent reports have bolstered the case for the Federal Reserve to begin raising interest rates as soon as next month. Traders are now pricing in a 72 percent probability that the central bank will increase borrowing costs at its December meeting.
"It looks as though we're going to go into the new year with a fairly solid backdrop," said Nick Ford, a fund manager who helps oversee the equivalent of $3.7 billion at Miton Group in London. "The U.S. is economy doing OK. The GDP number that came out this week was reassuring. I wouldn't be surprised to see a decent year-end rally for equity markets generally."
Stocks were little changed so far this week, with the S&P 500 remaining less than 2 per cent away from its May all-time high. A rally in energy shares yesterday helped equities erase an early slide triggered by the downing of a Russian warplane by Turkish forces. The benchmark has climbed 12 per cent since the bottom of an August selloff that was sparked by fears a slowdown in China's economy would spread.
Oil rose to more than $43 a barrel in New York as explorers idled more drilling rigs in an effort to curb the highest November supply since 1930.
Crude stockpiles in the U.S. rose 961,000 barrels to 488.2 million last week, according to an Energy Information Administration report Wednesday. The number of active oil rigs fell to 555, the least in five years, data compiled by Baker Hughes Inc. show. Prices climbed 2.7 per cent on Tuesday after Turkey shot down a Russian jet and Saudi Arabia repeated its willingness to stabilize world markets.
Oil has slumped 42 per cent in the past year amid speculation a global glut will be prolonged as the Organization of Petroleum Exporting Countries pumps above its collective target. U.S. crude stockpiles are more than 100 million barrels above the five-year seasonal average.
"There was a further decline in the rig count in response to the drop in prices, and that's not enough to rebalance the U.S. market, much less the global one," Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. "Crude supplies continue to rise even with a fall in the number of rigs. The EIA report was very bearish."
WTI for January delivery rose 17 cents to close at $43.04 a barrel on the New York Mercantile Exchange. It's the highest settlement since Nov. 11. The volume of all futures traded was 19 percent below the 100-day average at 3:49 p.m.
Brent for January settlement advanced 5 cents to end the session at $46.17 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at a $3.13 premium to WTI.
Crude inventories at Cushing, Okla., the delivery point for WTI futures, rose 1.74 million barrels to 58.6 million last week, the most since May.
U.S. refineries operated at 92 per cent of capacity on Nov. 20, up 1.7 percentage points from the prior week. Refiners in the country typically accelerate activity during November after performing maintenance during a low-demand period. Crude production slipped by 17,000 barrels a day to 9.17 million. That's down from a four-decade high of 9.61 million reached in June, weekly data show.