Canada's main stock index slipped on Tuesday, with gold miners weighing as bullion hit its lowest level since 2010 and energy stocks also lower as crude oil prices slid.
Equities failed to join a rally in global markets. European shares rose sharply on Tuesday, helped by encouraging updates from companies such as Germany's United Internet and Dutch-based Randstad, the world's second-biggest staffing company.
Sentiment was also bolstered by expectations of more stimulus from the European Central Bank and by Greece's preliminary deal with its international lenders on home foreclosures.
The Bloomberg Commodity Index, which measures a basket of resources, fell for the ninth time in 10 sessions to trade at a 1999 low. Firming inflation in the U.S. reinforced speculation the Federal Reserve will raise rates next month, boosting the dollar and damping commodities prices.
Oil declined in New York, closing at the lowest level in more than two months, as U.S. crude stockpiles are estimated to have expanded for an eighth week.
The Standard & Poor's/TSX Composite Index fell 37.13 points or 0.28 per cent to 13,280.39 in Toronto. The benchmark Canadian equity gauge had jumped 1.9 per cent Monday to snap an eight- day losing streak, the longest since 2002, as commodities briefly rallied. The S&P/TSX has lost 8.7 per cent this year, trailed only by Singapore and Greece among developed markets.
Canadian equities have been among the worst-performing in the world this year, led by declines in natural-resource and health-care stocks of at least 19 per cent. The country's equity market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest-rate increase from the Federal Reserve.
On Tuesday, the S&P/TSX Capped Financial Index added 0.5 per cent. Bank of Nova Scotia and Toronto-Dominion Bank added at least 0.7 per cent as the nation's largest lenders advanced a second day. The banks will report fiscal fourth quarter earnings beginning Dec. 1. Of the more than 200 companies in the S&P/TSX to report in the current period, about 60 per cent missed revenue estimates, according to data compiled by Bloomberg.
Barrick Gold Corp fell 8.7 per cent, Goldcorp Inc declined 5.1 per cent and Yamana Gold Inc was down 7.1 per cent as the Capped Materials Index tumbled 2.8 per cent.
Gold fell nearly 1 per cent, heading back around six-year lows, while copper prices touched their lowest point in more than six years.. Copper is down 26 per cent this year, following a 14-per-cent decline in 2014, as all efforts to revive metals prices from miners cutting supply to China stimulating demand have failed to halt a slide that kicked off three years ago and has since accelerated.
Valeant Pharmaceuticals International Inc. lost 4.3 per cent, extending a two-year low. Valeant, briefly the largest stock in Canada by market capitalization this year, has lost almost 75 per cent from an Aug. 5 high amid pressure over how it prices its drugs.
The embattled drugmaker's latest product, the female libido pill Addyi, isn't selling with only 227 prescriptions for the drug so far in its first few weeks on the market. By comparison, more than half a million men got prescriptions fro Viagra in its first month on sale in 1998.
Shopify Inc., the Ottawa-based e-commerce software company, tumbled 3.6 per cent as the stock's lockup for company insiders lifted. The restrictions had previously prevented the company's venture investors and employees from selling more than 67 million shares held at Shopify's initial public offering in May.
U.S. stocks were little changed as a retreat in energy shares offset higher-than-forecast earnings from Home Depot Inc. and Wal-Mart Stores Inc., while firming inflation bolstered speculation the Federal Reserve will raise interest rates next month.
Crude oil renewed a selloff a day after the commodity's climb ignited the strongest gains among energy companies in six weeks. Today's reversal overshadowed a rally in retailers led by Home Depot after the group's worst weekly drop in four years.
The Standard & Poor's 500 Index slipped 0.1 per cent to 2,050.41 in New York, after erasing an earlier gain of as much as 0.7 per cent. The gauge's advance stalled at its average price during the past 200 days.
"We're coming off of a strong day yesterday," said Alan Gayle, senior strategist for Atlanta-based RidgeWorth Investments, which oversees $40-billion. "The fact that the market is catching its breath and waffling around flat is an encouraging sign. There's a never-ending swirl of geopolitical angst that tends to take center stage, but the big macro event that the market is focusing on is the December FOMC meeting."
A report today showed the cost of living excluding food and fuel rose again in October after picking up the prior month, showing inflation edging closer toward the Fed's goal. It was the strongest back-to-back readings since May and April.
Separate data showed factory output increased in October for the first time in three months as producers turned out more construction materials and motor vehicles. Total industrial production unexpectedly dropped for a second month as warm weather reduced electricity demand and the oil industry continued to cut back. Meanwhile, a gauge on homebuilders' sentiment slipped this month while remaining at its second- highest post-recession level.
Traders are now pricing in a 64-per-cent probability that the Fed will raise rates next month. Minutes from the Fed's October policy meeting will be released on Wednesday.
"There seems to be some data reassurance coming out," said Ben Kumar, who helps oversee about $14 billion as an investment manager at Seven Investment Management in London. "In the U.S., you've seen sufficient data to suggest that interest rates are not going up prematurely, that the economy is strong enough to withstand a hike."
The S&P 500 on Monday ended a three-day losing streak that capped declines in seven of eight sessions. The benchmark closed Monday 3.6 per cent below its record set in May after coming within 1 percent of its high on Nov. 3.
With the earnings season drawing to an end, Staples Inc. and Gap Inc. are also among S&P 500 companies reporting results this week. Of those that have done so already, about 74 per cent beat profit projections and 43 per cent beat sales estimates. Analysts now project profits for index members dropped 3.7 per cent in the third quarter, improved from calls for a 7.2-per-cent decline at the start of the season.
West Texas Intermediate oil fell 2.6 per cent as French jets bombed Islamic State targets in Syria for a second day. U.S. crude supplies probably rose by 2 million barrels last week, according to a Bloomberg survey before Energy Information Administration data Wednesday. Oil futures settled at the lowest level since August when prices tumbled to a six-year low. Both gasoline and diesel futures dropped to the lowest since 2009.
"The weak fundamentals are the focus today," Gene McGillian, a senior analyst at Tradition Energy in Stamford, Conn. "Fears of excess supply and a slowing global economy are driving prices lower. It looks like we're about to test the six-year lows again."
Oil has slumped 46 per cent the past year amid speculation a global glut will persist as the Organization of Petroleum Exporting Countries continues to pump above its collective quota and Russian production has climbed to a post-Soviet high. French President Francois Hollande called on the U.S. and Russia to forge a new alliance to destroy Islamic State.
WTI for December delivery fell $1.07 to settle at $40.67 a barrel on the New York Mercantile Exchange. It was the lowest close since Aug. 26. The volume of all futures traded was 9.4 per cent above the 100-day average.
Brent for January settlement declined 99 cents, or 2.2 per cent, to end the session at $43.57 a barrel on the London- based ICE Futures Europe exchange. It was the lowest settle since Aug. 26. The European benchmark crude closed at a $1.86 premium to WTI for January delivery.
U.S. crude inventories climbed to 487 million barrels through Nov. 6, keeping supplies more than 100 million barrels above the five-year seasonal average, according to EIA data. Refinery runs probably rose 0.5 percentage points last week to 90 per cent of total capacity, the Bloomberg survey shows. Inventories of gasoline and distillate fuel, a category that includes diesel and heating oil, both probably fell 500,000 barrels.
In Europe, the FTSEurofirst 300 index surged 2.6 per cent.
MSCI's all-country world index rose 0.5 per cent.
"Overall, there is a macro tailwind for European equities," said Lorne Baring, managing director of B Capital Wealth Management. "The monetary policy of the (European Central Bank) will continue to weaken the euro versus other major currencies."
Greek stocks surged and bond yields hit their lowest in more than a year after the country's finance minister said Athens had reached an agreement with its lenders on financial reforms.
With files from Reuters