Canadian stocks sank to the lowest level since February on a closing basis, as crude in London and New York slumped to the weakest in five years after OPEC said demand will drop next year to the lowest levels since 2003.
Penn West Petroleum Ltd. and Crescent Point Energy Corp. plunged at least 11 percent as energy producers renewed declines. Laurentian Bank of Canada dropped 4.1 percent to pace declines among financial services stocks. Yamana Gold Inc. rose 1.8 percent as the producer plans to shift some of its Brazil mines into a new unit.
The Standard & Poor's/TSX Composite Index fell 346.10 points, or 2.4 percent, to 13,849.63 at 2:02 p.m. in Toronto. A close at the level would be the lowest since Feb. 10. The equity gauge has dropped 4.3 percent this week, paring its advance this year to 1.7 percent.
Oil, bank and raw-materials are the biggest laggards in Canada for the first time since at least 1988, fueling concern the nation's economy is fading just as the U.S. is taking off. The three industries, which collectively account for two-thirds of the S&P/TSX, are the worst performers among 10 groups this year, led by a 18 percent slump in energy, according to data compiled by Bloomberg.
Penn West tumbled 14 percent to C$2.62, a 1996 low, and Crescent Point plunged 11 percent to C$22.27 as energy stocks sank 5.2 percent as a group, a two-year low. Nine of 10 industries in the index fell on trading volume 34 percent higher than the 30-day average at this time of the day today.
West Texas Intermediate crude fell as much as 5.3 percent to below $61 a barrel in New York and Brent dropped 4.2 percent to a five-year low as the Organization of Petroleum Exporting Countries lowered its estimate for 2015 demand for its oil by about 300,000 barrels a day to 28.9 million.
Oil has collapsed into a bear market amid the highest U.S. output in more than three decades and signs of slowing global demand growth. Prices now are below what 10 out of OPEC's 12 members need for their annual budgets to break even, according to data compiled by Bloomberg. Kuwait and Qatar are the exceptions.
Canadian Pacific Railway Ltd. slipped 4.1 percent to C$202.58 and Canadian National Railway Co. retreated 3.6 percent to C$74.05 as industrial stocks lost 2.5 percent.
Laurentian Bank of Canada declined 4.1 percent to C$48.22, the biggest drop in a year. The bank reported fourth-quarter profit that missed analysts' estimates on charges from cutting jobs and reorganizing businesses.
The nation's largest lenders plunged the most in three years last week after posting disappointing earnings.
Wall Street Misery
U.S. stocks also fell, extending the week's decline for the Standard & Poor's 500 Index, as energy shares renewed a selloff after OPEC cut its forecast on 2015 demand for crude.
ConocoPhillips, Exxon Mobil Corp. and Chevron Corp. lost more than 2.9 percent. The five worst performers in the S&P 500 were energy companies. Yum! Brands Inc. sank 4.9 percent after cutting its 2014 profit forecast amid a health scare in China. United Continental Holdings Inc. and Southwest Airlines Co. rose at least 4.1 percent after an industry group said global airlines will make record profit next year.
The S&P 500 lost 1.2 percent to 2,036.15 at 2:09 p.m. in New York. The benchmark gauge has slumped 1.9 percent over the past three days, after reaching a record on Dec. 5. The Dow Jones Industrial Average dropped 205.16 points, or 1.2 percent, to 17,596.04. Trading in S&P 500 companies was 9.4 percent above the 30-day average for this time of the day.
"Oil is lower on the reduced demand outlook and it's not a surprise to see the rest of the market, at least in sympathy, going down on that," Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. "Without any news to prompt the market to move higher today, it puts the onus back on the bulls to see how much conviction they have in buying stocks."
The S&P 500 closed little changed yesterday after reversing a loss of as much as 1.3 percent. The gauge has jumped 11 percent in 2014, heading for a third year of gains, fueled by better-than-forecast economic data and corporate earnings.
Data later this week may show U.S. retail sales increased in November, initial jobless claims last week stayed unchanged from a week earlier, and consumer confidence improved this month, according to economists surveyed by Bloomberg.
Oil tumbled to a five-year low. OPEC cut its forecast for how much crude it will need to provide in 2015 to the lowest in 12 years amid surging U.S. shale supplies and reduced estimates for global consumption.
The Organization of Petroleum Exporting Countries lowered its projection for 2015 by about 300,000 barrels a day, to 28.9 million a day. That's about 1.15 million a day less than the group's 12 members pumped last month, and the 30-million barrel target they reaffirmed at a meeting in Vienna on Nov. 27. The impact of this year's 40 percent price collapse on supply and demand remains unclear, OPEC said.
Energy companies in the S&P 500 dropped 3.6 percent. Denbury Resources Inc. plunged 8.1 percent and Oneok Inc. retreated 7 percent. The group is down 13 percent since the beginning of November, and has plummeted 25 percent from a high in June.
All 10 groups in the S&P 500 declined as materials, industrial and phone shares each lost more than 0.8 percent.
The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, climbed 18 percent to 17.57. The gauge has soared 48 percent in three days, the most since October.
Banks in the S&P 500 fell as JPMorgan Chase & Co. said it will probably report a "high teens" percentage drop in fourth- quarter trading revenue from a year earlier. JPMorgan dropped 2.6 percent, while Goldman Sachs Group Inc. and Citigroup Inc. lost more than 1.9 percent.
Yum declined 4.9 percent. The owner of the KFC and Taco Bell fast-food chains said earnings per share will rise by a mid-single-digit percentage, excluding some items. That is down from a 20 percent growth forecast that was issued in July.
A Bloomberg index of U.S. airlines surged 2.8 percent. The industry may generate a record $25 billion in net income next year, the International Air Transport Association said today. United Continental gained 5 percent, while Southwest jumped 4.1 percent. American Airlines Group Inc. advanced 3 percent.
Broadcom Corp. climbed 1.1 percent. The integrated circuit maker, which has seen strong demand for chips for connected devices such as Apple Inc.'s iPhone and iPad, raised its revenue guidance for the fourth quarter.