Trader Tommy Kalikas, centre, works on the floor of the New York Stock Exchange, Thursday, May 12.Richard Drew/The Associated Press
Canadian stocks finished flat on Thursday as oil settled at the highest level in more than six months as the market weighed concern of a reduction in global crude supply with Canadian producers planning to resume oil-sands output.
The benchmark S&P/TSX Composite Index lost 0.41 points, to 13,787.8 in Toronto, erasing an earlier advance of as much as 0.7 per cent. Four of 10 industries in the S&P/TSX declined. The gauge now trades at 20.8 times earnings, about 9.1 per cent higher than the 19.1 times valuation of the S&P 500, data compiled by Bloomberg show.
Suncor Energy Inc. dropped 1 per cent and Encana Corp. fell 2.2 per cent as energy producers rose 0.2 per cent as a group, fluctuating most of the day after an early gain of as much as 1.6 per cent. Crescent Point Energy Corp. jumped 4.9 per cent for a third day of gains. The company reported a first-quarter loss narrower than analysts had forecast.
Raw-materials producers slumped 1.8 per cent, the most in the S&P/TSX. Barrick Gold Corp. lost 1.8 per cent while First Quantum Minerals Ltd. retreated 5.3 per cent to lead base-metals producers lower. Gold fell on Thursday as a strengthening dollar prompted some buyers to cash in gains after its biggest daily rise this month, briefly paring losses after downbeat U.S. jobs data.
Goldcorp Inc. tumbled 3.9 per cent after agreeing to buy Kaminak Gold Corp. in a share-swap deal worth $520-million. The purchase price values Kaminak at a 40-per-cent premium to its 20-day average, and will involve Goldcorp issuing about 21.6 million shares.
U.S. stocks closed little changed in a whipsaw session, as rising oil prices bolstered an afternoon rebound while a sell-off in Apple Inc. was offset by gains in Monsanto Co.
Apple fell to a 22-month low after a report fueled speculation iPhone sales continue to slump. Monsanto jumped 8 percent as people familiar with the matter said Bayer AG is exploring a potential bid for the U.S. competitor.
The S&P 500 fell less than 0.1 per cent to 2,064.29 in New York, after swinging between gains and losses. An earlier decline halted at the index's average price during the past 50 days. The Nasdaq 100 Index lost 0.4 per cent on Apple's drop.
"The markets have expended a lot of energy to stay flat," said Eric Wiegand, senior portfolio manager at the Private Client Reserve of U.S. Bank in New York, which oversees $125 billion. "It really is like trying to tread water in a very choppy environment. We're seeing a lot of rotation beneath the surface. We're not surprised by volatility. Not just some downside volatility like yesterday, but the potential for upside price movements as well."
A roller-coaster week continued as equities struggled to regain upward momentum that has remained elusive since the S&P 500 reached a four-month high three weeks ago. The benchmark rallied the most in two months on Tuesday amid a rebound in commodities, only to dive yesterday after disappointing results from Walt Disney Co. and Macy's Inc. battered consumer shares and sparked a broader sell-off.
Oil futures seesawed between gains and losses in intraday trading in New York before settling above $46 a barrel for a second day.
Producers in Canada plan to resume output at some oil-sands sites after wildfires took production offline, while Nigeria said militant attacks have cut output by as much as 600,000 barrels a day. U.S. inventories dropped by 3.4 million barrels last week, government data showed Wednesday.
Canadian mines and drilling projects north of Fort McMurray are bringing back some of the roughly 1 million barrels a day of supply that was curbed amid fires, Suncor Energy Inc. Chief Executive Officer Steve Williams said Tuesday. Canadian Natural Resources Ltd. said it restored normal production rates at its Horizon oil-sands site in Alberta and Enbridge Inc. expects to restart its Athabasca crude pipeline this weekend.
"The market is looking at the Canadian oil sands while they come back to production over the next few weeks," Bart Melek, head of global commodity strategy at TD Securities in Toronto, said by telephone. "It may be a month before everything is back on track."
Outages in Canada may continue into summer depending on the extent of damage and the unavailability of staff, the Energy Information Administration said in its This Week in Petroleum report.
West Texas Intermediate for June delivery rose 47 cents to settle at $46.70 a barrel, the highest since Nov. 3, on the New York Mercantile Exchange. It earlier rose as high as $47.02 and dipped as low as $45.61 in Thursday trading. Brent for July settlement climbed 48 cents to end the session at $48.08 a barrel on the London-based ICE Futures Europe exchange.
While a deteriorating security situation has curbed Nigerian supply, gains from Iran and Iraq have helped to boost Organization of Petroleum Exporting Countries production to about 33 million barrels a day. Iran's crude production has returned to pre-sanction levels as the nation ramps up output to regain market share, according to the International Energy Agency.
The global surplus in the first half of this year will probably be smaller than previously estimated because of robust demand in India and other emerging nations, the IEA said. Still, further gains in oil prices "are likely to be limited by brimming crude and products stocks," it predicted.
U.S. crude stockpiles declined to 540 million barrels in the week ended May 6, yet still remain near the highest level since 1929, according to a report Wednesday from the Energy Information Administration. Production slid for a ninth week to 8.8 million barrels a day, the lowest since September 2014.
"Strong draws in gasoline, distillates and the drop-off in supplies caused a little uptick," Michael Corcelli, chief investment officer of hedge fund Alexander Alternative Capital in Miami, said by telephone. "Even with the weekly numbers that came out, we're still seeing supply-demand imbalances. We can't get ahead of ourselves and fool ourselves that this is a real rally that has legs."
With files from Reuters