The Toronto stock market closed lower Friday as traders hoped a weekend meeting of G20 finance ministers would tackle worries that some countries are using their currencies for economic gain.
The S&P/TSX composite index was down 35.16 points to 12,686.63, led by steep declines for gold stocks while the TSX Venture Exchange slipped 10.91 points to 1,185.65.
The Canadian dollar was down 0.49 of a cent to 99.39 cents US as Statistics Canada reported that manufacturing sales fell 3.1% during December to $48 billion, led by lower sales in the transportation equipment sector. It was the biggest decline since May 2009. Economists had expected only a 0.8% pullback.
New York finished well off early levels after a Bloomberg report warned of a very tough month for retailing giant Wal-Mart Stores Inc.
It quoted an email from Jerry Murray, a Wal-Mart vice president, to another executive that said “February (month-to-date) sales are a total disaster.” Murray also called this February the worst start to a month in his seven years with the company.
Wal-Mart shares closed down 2.15% to US$69.30.
The Dow Jones industrials gained 8.37 points to 13,981.76, the Nasdaq was down 6.63 points to 3,192.03 while the S&P 500 index slipped 1.59 points to 1,519.79.
The University of Michigan’s consumer confidence index for February came in at 76.3, better than the 75 reading that was expected and up from 73.8 in January.
Meanwhile, the G20 meeting in Moscow takes place amid speculation of a “currency war” in which countries devalue their currencies to gain a competitive edge.
The Japanese yen has been the currency primarily in focus this week.
Japan, the world’s third-largest economy, faces charges that it is trying to lower the value of the yen to stimulate its economy.
The yen fell to a 21-month low against the U.S. dollar this week and a near three-year trough against the euro.
As the yen falls, Japanese exports become cheaper compared with goods from other regions that are also trying to pull out of an economic malaise.
Earlier this week, the volatility in the currency markets prompted the Group of Seven leading industrial nations, which include the U.S, Canada, four European Union countries, as well as Japan, to warn that volatile movements in exchange rates could adversely hit the global economy and to reaffirm their commitment to market-driven exchange rates.
On Friday, the yen strengthened ahead of the G20 meeting with analysts expecting pressure to be exerted on Japan’s finance minister and central banker to at least commit to not allow the yen to fall much more.
“The greater fear would probably be that this goes further and significantly so,” said Bob Gorman, chief portfolio strategist at TD Waterhouse.
“I think that if there is some language that suggests that is not the case and what has happened has happened but you won’t see much more of it, I suspect that would have a calming effect on the markets.”
The TSX ended the week down 0.89%, reflecting earnings disappointments in the resource sector while the Dow industrials was flat for the week.
The gold sector led TSX decliners, down about 3% as April bullion on the New York Mercantile Exchange lost $26 to US$1,609.50 an ounce. Iamgold faded 36 cents to C$7.96.
Goldcorp Inc. fell 68 cents to $33.99 as the miner said Thursday that record gold production levels at two mines in Ontario and Mexico helped it deliver a half-billion dollar profit in the fourth quarter and positioned it well for the coming year. Adjusted earnings were 57 cents per share, beating analyst expectations of 54 cents per share.
The base metals sector slipped 1.29% while March copper in New York was unchanged at US$3.73 a pound. Teck Resources declined 91 cents to C$33.29.
The March crude contract fell $1.45 to US$95.86 a barrel and the energy sector was off 0.43%. Suncor Energy fell 44 cents to $31.75.
Techs were also weak with BlackBerry down 82 cents to $14.23.
Telecoms led TSX advancers after Rogers Communications Inc. exceeded analysts’ expectations in the fourth quarter of 2012. Rogers posted quarterly net income of $455 million or 88 cents a share, beating expectations of 72 cents.
Rogers’ revenue was $3.26 billion against expectations of $3.19 billion.
Rogers also announced that president and CEO Nadir Mohamed will retire in January 2014 but will continue to lead the company through 2013. Its stock was ahead $1.85 to $47.32.
And Telus Corp. said its quarterly net earnings rose almost 23% from a year ago to $291 million, or 89 cents per share. Revenue rose 6% to $2.85 billion from $2.69 billion and its shares were up $1.03 to $67.81.
Enbridge Inc. reports it had $146 million of earnings attributable to shareholders in the fourth quarter, or 18 cents per common share, with nearly $7.2 billion of revenue. On an adjusted basis, the profit amounted to $327 million or 42 cents per common share, two cents below analyst estimates.
Enbridge is also joining up with a partner to convert some of their natural gas capacity to ship crude oil from a pipeline hub in Illinois to refineries in the eastern Gulf Coast refinery market. The Calgary-based pipeline company and Energy Transfer Partners would each own 50% of the joint venture, which they expect to be in service by 2015. Enbridge shares ticked 23 cents higher to $44.36.