Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Toronto stock market falls amid lower commodities and ECB's surprise rate cut

A man watches the financial numbers at the TMX Group in Toronto's financial district in a May 9, 2014 photo. THE CANADIAN PRESS/Darren Calabrese

Enlarge Image

A man watches the financial numbers at the TMX Group in Toronto's financial district in a May 9, 2014 photo. THE CANADIAN PRESS/Darren Calabrese

TORONTO - The Toronto stock market ended lower on Thursday, weighed down by energy and gold stocks despite a better than expected report on merchandise trade for July and plans by the European Central Bank to stimulate the eurozone's weak economic recovery.

The S&P/TSX composite index shed 80.84 points to 15,576.79. The Canadian dollar was ahead 0.12 of a cent at 91.96 cents US.

Wall Street indexes also stepped back from earlier gains to finish lower, with the Dow Jones industrials dipping 8.70 points to 17,069.58, the Nasdaq losing 10.28 points to 4,562.29 and the S&P 500 index falling 3.07 points to 1,997.65.

The ECB trimmed its benchmark interest rate to a record low of 0.05 per cent from the previous all-time low of 0.15 per cent. It also cut its growth forecast for 2014 to 0.9 per cent from 1.0 per cent and lowered its inflation forecast for the year to 0.6 per cent from 0.7 per cent.

ECB president Mario Draghi also said the bank will start buying asset-backed securities and covered bonds in October.

The efforts are aimed at making credit cheaper as concerns continue to grow that the economy of the 18-country eurozone might go into reverse.

"The eurozone was moving in the right direction over the last few years, but . . . it's (now) going backwards a little bit, so something had to happen," said Sadiq Adatia, chief investment officer at Sun Life Global Investments.

"This is another sign that the ECB will do something, whatever it takes, to move the markets higher and get growth back into the economy."

Although the timing may have been a surprise, the measures fell short of expectations by some that an ECB stimulus program would involved the purchase of government bonds, similar to what the U.S. Federal Reserve has done.

In economic news, Statistics Canada reported a higher than anticipated trade surplus. The agency said Canada's merchandise exports grew by 1.4 per cent in July, while imports edged down 0.3 per cent. That raised the country's trade surplus with the world to $2.6 billion from $1.8 billion in June. Economists had expected a surplus of about $1.2 billion, according to Thomson Reuters.

There was some encouraging news from in the United States.

U.S. services firms expanded in August at the fastest pace on record and businesses added jobs at a healthy pace in August, according to a private survey, the fifth straight month of solid gains.

Meanwhile, traders will look to U.S. job figures for August as well as the latest Canadian jobs data, both being released Friday.

On the corporate front, Manulife Financial Corp. (TSX:MFC) announced after markets closed on Wednesday that it was buying the Canadian operations of Standard Life for $4 billion in cash. Manulife said the acquisition will boost its presence in Quebec, which it has underserved in the past. Its shares closed down 1.39 per cent, or 31 cents, to $22.05 on the Toronto Stock Exchange.

In commodities, the December crude contract was down $1.09 to US$94.45 a barrel, while December gold bullion fell $3.80 to US$1,266.50 an ounce. December copper jumped two cents to $3.15.

Adatia said investors are pulling back from gold and oil because the global economy, particularly the U.S. economy, is looking strong.

Follow @LindaNguyenTO on Twitter.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Election 2014
Brandon Sun Business Directory
The First World War at 100
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates