All about business

Energy stocks led the way to a lower session on the Toronto stock market yesterday even as oil prices continued to head higher.

Costly oil and dismal housing data sent New York markets down sharply.

Toronto’s S&P/TSX composite index fell 69 points to 14,723.36.

The Toronto market’s main index shed 260.84 points, or 1.75 per cent, this week after closing above 15,000 for the first time on Tuesday.

But markets started to lose ground at mid-week after the U.S. Federal Reserve warned of higher-than expected-inflation and lower economic growth.

Rally losing steam

And investors started to wonder if the meteoric rise in the TSX – about 20 per cent from the lows of late January, largely on the back of higher oil prices – had just about run out of steam.

"People are saying it’s great to have oil from an investing point of view at $133 a barrel – but can this last?" said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver. "I think it’s time to take some money off the table – not all of it, I wouldn’t want to be not part of it, but I don’t think you would want to load up on it."

The TSX Venture Exchange climbed 26.04 points to 2,706.37 while the Canadian dollar shed 0.24 of a cent to 101.19 cents (U.S.).

New York’s Dow Jones industrials tumbled 145.99 points to 12,479.63, shedding 506 points, or 3.8 per cent, this past week.

The Nasdaq composite index slid 19.91 to 2,444.67 while the S&P 500 index moved down 18.42 to 1,375.93 after the National Association of Realtors said single-family home sales dropped 1 per cent in April from May.

The TSX energy sector lost early gains to move down 0.48 per cent while the June crude contract in New York climbed $1.38 to $132.19 a barrel.

Petro-Canada lost 82 cents to $59.18 (Canadian), while Canadian Natural Resources fell $1.48 to $100.62.

Crude had tumbled $2.36 (U.S.) Thursday as investors took profits after the huge recent run-up, but analysts expect prices to move even higher.

Oil weighs on materials

"The market is really structurally tight .. no teletrak payday loans. and we’ve got investors – speculators – empowered to continue to power money into oil," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

However, Shum added: "The reality is, the faster it goes up for no apparent reason, when it comes down, it will be just as fast."

The materials sector was down as Potash Corp. lost $2.40 (Canadian) to $194.40, Sherritt International gave back 42 cents to $15 and Ivanhoe Mines lost 46 cents to $9.13.

High oil prices also affected transport stocks as Canadian National Railway fell $1.07 to $54.61 and Canadian Pacific lost $2.16 to $70.42.

TSX financials fell 0.46 per cent with Royal Bank of Canada down 58 cents to $49.82 and CIBC $1.26 lower to $72.25.

The market found some support from BCE Inc., which rose 96 cents to $33.60 following a 12 per cent loss Thursday after the Quebec Court of Appeal upended the proposed $52 billion takeover of the Bell Canada parent company by a group led by the Ontario Teachers’ Pension Plan.

Elsewhere in the telecom sector, Telus Corp. ran ahead 56 cents to $48.24.

The TSX gold sector was down slightly as the June bullion contract on the Nymex climbed $7.50 to $925.80 an ounce (U.S.). Barrick Gold Corp. faded 42 cents to $41.53 (Canadian).

Alaska favours pipeline

Elsewhere, TransCanada Corp. shares fell 44 cents to $39.48 after Alaska Governor Sarah Palin came out in favour of the company’s proposal for a natural gas pipeline from Alaska’s North Slope to a hub in Alberta.

General Motors Corp.’s stock dropped 83 cents to $17.60 (U.S.) after the company reported strikes at some of its own plants and parts supplier American Axle will cost the automaker about $2 billion before taxes in the second quarter.

On the TSX, declines beat advances 790 to 774 with 228 unchanged as 352.7 million shares traded worth $7.2 billion (Canadian).

The Canadian Press

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