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Trader Joseph Lawler works on the floor of the New York Stock Exchange, Friday, June 16. (Richard Drew/AP)
Trader Joseph Lawler works on the floor of the New York Stock Exchange, Friday, June 16. (Richard Drew/AP)

The close: TSX rises as energy shares rebound with oil Add to ...

Canada’s main stock index rose on Friday as energy shares rebounded with oil prices, offsetting losses for consumer staple companies on news that internet retailer Amazon.com Inc was buying Whole Foods Market Inc.

The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed up 31.97 points, or 0.21 per cent, at 15,192.39, after four straight days of losses. Six of the index’s 10 main groups ended higher

The Canadian consumer staples sector tumbled as much as 3.36 per cent in its sharpest fall since October 2008 before it pared losses to 1.4 per cent.

The country’s largest grocery chain operators all declined sharply.

Loblaw Companies Ltd, which has more than 2,300 corporate, franchised and associate-owned grocery stores and pharmacies across Canada, was down 3.6 per cent to $72.79, after falling as much as 5.8 per cent.

Empire Company Ltd, which has about 1,500 Canadian stores operating under banners including Sobeys and FreshCo, fell 3.6 per cent to $18.74. Metro Inc, which operates some 600 supermarkets in Quebec and Ontario, fell 2.9 per cent to $43.16.

Consumer discretionary shares also retreated sharply, declining 1.0 per cent, with Magna International Inc taking a 4.6-per-cent hit to trade at $57.30.

Dollarama Inc slid 1.1 per cent to $121.97, while Canadian Tire Corp fell 1.2 per cent to $147.67.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.5 per cent.

Teck Resources Ltd fell 8.6 per cent to $19.73, extending losses from the previous session after the miner said it was lowering its forecast of the average realized price for its steelmaking coal in the second quarter. Several analysts cut its target price on the news.

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Major U.S. stock indexes ended little changed on Friday even as Amazon.com’s $13.7-billion deal to buy upscale grocer Whole Foods roiled the retail sector and rocked shares of an array of companies including Wal-Mart and Target.

Energy sector shares helped buoy the S&P 500 and the Dow industrials, while Apple dragged on the Nasdaq.

The deal by Amazon, a proven retail disruptor, marked a major step by the internet retailer into the brick-and-mortar retail sector.

Wal-Mart shares sank 4.7 per cent, weighing the most on the Dow. Shares of Target, Walgreen Boots and Costco fell between 5 per cent and 7 per cent.

“It’s going to send a shock wave across the board, and this represents the true utmost in market disruption,” said Burns McKinney, chief investment officer with the Dallas investment team for Allianz Global Investors. “There’s big winners and big losers.”

Amazon shares gained 2.4 per cent, making the stock the biggest boost to the S&P 500. Whole Foods shares surged 29.1 per cent.

The S&P consumer staples sector fell 1 per cent, by far the worst performing major sector. The S&P 500 food and staples retailing index dropped 4.2 per cent.

Grocery chain Kroger was the biggest loser on the S&P 500, falling 9.2 per cent, while Supervalu dropped 14.4 per cent.

“I would not like to be somebody playing in the grocery space right now,” said Jan Rogers Kniffen, chief executive of retail consultancy firm J. Rogers Kniffen WWE in New York.

The Dow Jones Industrial Average rose 24.38 points, or 0.11 per cent, to end at 21,384.28, the S&P 500 gained 0.69 point, or 0.03 per cent, to 2,433.15 and the Nasdaq Composite dropped 13.74 points, or 0.22 per cent, to 6,151.76.

The technology sector fell 0.2 per cent, continuing its recent slump. Apple shares closed down 1.4 per cent.

Tech has led the S&P 500’s 8.7-per-cent rally this year, but posted its second week of declines, prompting questions over whether investors are moving money into other sectors.

“I think we need to see more of a pullback to say there is a serious rotation going on as opposed to just some profits coming off the top,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

Energy shares rose 1.7 per cent, propping up the S&P 500. Oil prices bounced off the year’s lows as some producers reduced exports and U.S. rig additions slowed.

U.S. homebuilding fell for a third straight month in May to the lowest in eight months as construction activity declined broadly. Investors were continuing to digest the Federal Reserve’s interest rate hike on Wednesday, with some concerned about the economy’s ability to absorb higher rates.

 

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