TORONTO – The Toronto stock market slid to a small loss Thursday as more positive news on bank earnings failed to offset a slight retreat in crude oil prices, which fell after briefly popping above US$50 a barrel.
At the close, the Toronto Stock Exchange’s S&P/TSX composite index was down 4.54 points at 14,049.20, ending a string of three consecutive gains that had been based largely on a slow but steady rise in oil prices.
However, after going as high US$50.21 in premarket trading, benchmark North American crude began to fade and settled down eight cents at US$49.48 a barrel. The last time West Texas Intermediate crude settled above US$50 a barrel was on July 21 when it was at US$50.86.
“I see the recovery in crude oil as a sign of improving confidence in the marketplace,” said Colin Cieszynski, chief market strategist at CMC Markets Canada.
“Oil had been very depressed back in February, falling down closer to $26 and it’s almost doubled off of that as it approaches the big $50 number, which is a huge round number for it to achieve in a fairly short period of time,” he said.
Cieszynski described the day’s slight pullback in oil prices as a “normal trading correction” but cautioned prices could level off near US$50 for a while for a number of reasons. Among them is the fact that higher prices could see some U.S. producers who had to shut production because of high costs coming back on stream.
He added that one of the other stories in Toronto was the bank earnings reports, with “very strong results” from CIBC (TSX:CM), Royal (TSX:RY) and TD (TSX:TD).
“But we aren’t seeing huge gains in the market,” he said. “I think that’s a function of the fact that the banks had run up pretty substantially heading into earnings season and (again) yesterday after the Bank of Montreal results. I suspect that some of the positive surprises had already been priced in and we might be seeing a bit of profit-taking against the news.”
Elsewhere in commodities, July natural gas fell three cents to US$2.15 per mmBTU, while June gold gave back $3.40 to US$1,220.30 a troy ounce and July copper was unchanged at US$2.10 a pound.
The Canadian dollar was up 0.31 of a U.S. cent at 77.10 cents US, adding to Wednesday’s big gain of almost three-quarters of a cent.
New York indexes were mixed after two days of big advances, with the Dow Jones industrial average shedding 23.22 points to 17,828.29 and the broader S&P 500 giving back 0.44 of a point to 2,090.10. The tech-heavy Nasdaq squeezed out a 6.88-point advance to 4,901.77.