TORONTO – The Toronto stock market closed lower Friday as steep declines in the energy, gold and metals sectors took back some of the gains seen earlier in the week, while data showed the U.S. economy was weaker than expected in the first quarter.
The S&P/TSX composite index dropped 109.31 points to 12,220.20 as the U.S. government reported that gross domestic product grew at an annualized rate of 2.5 per cent in the first quarter. Economists had expected growth of three per cent.
The loonie was up of 0.38 of a cent at 98.34 cents US.
New York markets were mixed as the Dow Jones industrial average rose 11.75 points to 14,712.55. The Nasdaq lost 10.73 points to 3,279.26 and the S&P 500 was down 2.92 at 1,582.24. The TSX Venture up 0.55 of a point to 965.22.
Despite coming in below expectations, U.S. GDP growth for the first three months of 2013 was still much better than the 0.4 per cent reported in the final quarter of 2012.
“The GDP report did miss consensus but, overall, it’s still a very positive number,” said Jeff Bradacs, portfolio manager at Manulife Asset Management.
“Some people see it as an inventory build there, that the second quarter might be weaker. However, I’d say it was a relatively strong number especially when you compare around the globe, the lack of GDP growth. The U.S. actually is standing out, showing some growth relative to Europe and other countries.”
Officials said much of the gain was from a jump in consumer spending, which rose at an annual rate of 3.2 per cent — the largest increase since the end of 2010. Government spending fell at a 4.1 per cent annual rate, led by another deep cut in defence spending.
Economists forecast that the U.S. GDP will continue to slow in the April-to-June quarter to a rate of just two per cent growth, and stay at that level for the rest of the year.
Oil and metal had risen sharply over the previous two sessions amid data showing U.S. oil inventories growing less than expected last week, a report from Goldman Sachs predicting a rebound in copper prices and hopes that the European Central Bank will cut interest rates next Thursday to boost the Continent’s economy.
The majority of sectors on the Toronto exchange were down, led by steep declines in base metals, gold and energy as weak GDP figures depressed commodity prices.
Metals and mining saw the largest decrease with a 4.53 per cent drop as May copper moved down five cents to US$3.18 a pound.
Teck Resources (TSX:TCK.B) fell 78 cents to C$26.30.
The gold sector fell 3.74 per cent as June bullion closed down $8.40 to US$1,453.60 an ounce, but still a big improvement after plunging last week to US$1,361 an ounce, its lowest level in more than two years.
Barrick Gold (TSX:ABX) faded 66 cents to C$18.80.
Gold miner Agnico-Eagle Mines Ltd. (TSX:AEM) reported that it earned US$23.9 million or 14 cents per share in the latest quarter, down from $78.5 million or 46 cents per share a year ago. Revenue for the quarter totalled $423.2 million, down from $474.1 million. Its shares were down $1.80 cents to $31.85.
The energy sector slipped 1.14 per cent while the June crude contract fell 64 cents to $93 a barrel. Canadian Natural Resources (TSX:CNQ) gave back 62 cents to C$29.58.
Energy company Chevron lent support to New York markets as it beat analyst expectations even though it said lower oil prices hit its bottom line. The company’s net income fell to $6.2 billion, or $3.18 per share, on revenue of $56.8 billion. Last year the company earned $6.5 billion, or $3.27 per share, on revenue of $60.7 billion. Analysts expected Chevron to earn $3.09 per share.
Pipeline and power company TransCanada Corp. (TSX:TRP) reported net earnings below expectations. The company,which is looking to build the Keystone XL pipeline, said it had net income of $446 million or 63 cents per share in the first quarter. Comparable earnings were $370 million or 52 cents per share, a penny below analyst estimates.
Meanwhile, TransCanada said it expects its long-delayed pipeline to be in service in the second half of 2015 — months later than its previous estimate as the company continues to await U.S. government approval for the project. Its shares were down 63 cents to $49.14.
— With files from Malcolm Morrison