Commodity prices lower overall as demand falls off
Province
TORONTO — The Toronto Stock Exchange suffered a decline yesterday as key commodity prices fell and the cost of oil fluctuated wildly.
The S&P/TSX Composite Index — made up by more than 45 per cent of energy and materials stocks — fell 144.17 points, or one per cent, to close at 13,841.86. That left it 2.4-per-cent short of its record close of 14,176.42, reached a week earlier.
The Venture Composite Index was down 45.2 points, or 1.4 per cent, to 3,189.89 while the dollar declined nine basis points to 93.40 cents US.
U.S. markets were down. The Dow Jones declined a modest 8.21 points, or 0.1 per cent, to finish at 13,352.05. The Nasdaq Composite Index was down 11.88 points, or 0.5 per cent, to 2,577.08.
“Overall commodity prices were low . . . reflecting some concern about weakening in China and demand for commodities” said Benjamin Tal, senior economist with CIBC World Markets in Toronto. “We’re talking about silver, copper, aluminum.
“Also, gold prices were a little bit weak and oil prices were kind of volatile this session because of what’s going on in Nigeria.”
The price of oil closed at $69.18 US a barrel, up four cents a day. It was down more that $1.50 at one point following the end of an oil workers strike in Nigeria, the biggest petroleum producer in Africa, easing supply concerns.
Natural-gas prices fell for the sixth straight day on Calgary’s Natural Gas Exchange, declining 10 cents to $5.79 per giga-joule on forecasts of moderate temperatures in the coming days, easing the demand for energy-consuming air-conditioning.
The Toronto energy index fell 1.9 per cent yesterday. Leading the downward drive was EnCana Corp., Canada’s biggest natural-gas producer, which dropped $2.71, or 3.9 per cent, to $67.34.
The TSX materials index was down 1.5 per cent. Contributing to the decline was Teck Cominco Ltd., which lost $1.57, or 3.3 per cent, to $46.63. As well, Barrick Gold Corp. fell 86 cents, or 2.7 per cent, to $30.94.
Tal said other factors contributing to the TSX’s overall decline was continuing problems in the U.S. with regard to the housing market and problems for financial firms caused by the issuance of sub-prime mortgages.
However, this same aspect helped ease declines in interest-sensitive stocks in Canada, Tal said.
© The Vancouver Province 2007
