David Pett, Financial Post
Canadian stocks got tripped up again Friday as negative economic news continues to pile up on both sides of the border.
The S&P/TSX Composite Index fell 67.86 points, or 0.77% to 8694.90 to finish another month in negative territory. Down 3.2% in January, Canada's main exchange has now fallen for five months in a row. In stark comparison, the TSX Venture exchange closed the first month of 2009 in the black and extended a six day winning streak Friday, to close up 2.09 points or 0.24% to 882.63. The junior exchange rose a healthy 10% in January.
The Canadian dollar, meanwhile, closed down 22 basis points to 81.53 cents US.
"I had been expecting more bad news to unfold and January certainly provided its share," said Adrian Mastracci, portfolio manager with KCM Wealth Managemen in Vancouver. "I'm still extremely cautious about markets and think capital preservation should continue to be a top priority for investors."
Mr. Mastracci said he wouldn't put much weight on the venture exchange's solid January, considering the absolute "shellacking" it took last year. "It was due for a lift," he said.
The bad news that weighed down equities in Toronto on Friday came in the form of weak GDP numbers released both in Canada and the U.S.
Canada's gross domestic product shrank 0.7% in November which was 0.3% worse than economists had expected and the most since 2003. GDP in the U.S. fell less than anticipated dropping 3.8% in the fourth quarter, but it was still the biggest drop since 1982. Consensus had been for U.S. output to shrink at a pace off 5.5%.
Energy stocks led the way down, dropping 1.37% as light crude oil climbed US24¢ to hit US$41.68.
Canadian Natural Resources Inc., lost 35¢ to $43.89 while UTS Energy Inc., remained flat at $1.73 despite being one of the most active stocks on the day with more than 13 million shares trading hands. On Tuesday, Total SA, launched a hostile $1.30 bid for UTS. Gold prices rose to US$927.30 an ounce, up US$22.20 but that didn't rally gold stocks and the materials group dropped 1.3% as a result.
In the U.S. all three indices fell on the disappointing GDP numbers and another day of disappointing corporate estimates. The Dow Jones Industrial Average lost 148.15 points or 1.82% to 8000.86 and the NASDAQ Composite dropped 31.42 points or 2.08% to 1476.42. The S&P 500 closed at 825.88, down 19.26 points or 2.28%. for its fourth straight weekly drop. Proctor and Gamble fell 6% after lowering its annual guidance and Alcoa Inc. lost 8% after JP & Morgan lowered the aluminum producers 2009 loss estimate.
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