Toronto market falls as gold and oil prices slip, U.S. markets flat

TORONTO – The Toronto Stock Exchange closed lower Tuesday as commodity prices continued their recent slide and the shares of Valeant Pharmaceuticals took another hit.

The S&P/TSX composite index fell 37.13 points to end the day at 13,280.39, led lower by losses in the gold and materials subsectors.

Tuesday’s loss comes after the TSX posted a 242-point gain on Monday to snap an eight-day losing streak.

Valeant Pharmaceuticals, whose stock prices has fallen by more than 70 per cent as American politicians have criticized its practice of raising drug prices and regulators have scrutinized its relationship with specialty pharmacy Philidor, dropped another $4.22 to end the day at $93.57.

On commodity markets, the December gold contract fell $15 to settle at US$1,068.60 an ounce, while the December crude oil contract lost $1.07 to US$40.67 a barrel and the January contract for natural gas lost 2.7 cents to US$2.527 per mmBtu.

“Concerns about slowing demand from China and other emerging markets are weighing on commodity prices, and therefore the underlying equities as well,” said Tim Caulfield, director of Equity Research and portfolio manager at Franklin Bissett Investment Management.

Caulfield said it’s unclear how demand for Canada’s raw materials and precious metals will rebound as the world economy deals with tepid growth and low inflation.

“It’s just a time of uncertainty where there are so many question marks,” he said.

Despite the fall in commodities, the Canadian dollar ended the day up 0.09 of a cent at 75.14 cents U.S.

New York markets saw little change as the Dow Jones industrial average rose 6.49 points to close at 17,489.50, the broader S&P 500 index fell 2.75 points to 2,050.44 and the Nasdaq climbed 1.4 points to 4,986.01.

A U.S. Labor Department report said the consumer price index rose 0.2 per cent in October after falling the previous two months.

“October’s inflation numbers are just the sort of confirmation the Fed is looking for that domestic strength is generating inflationary pressures,” said Leslie Preston, an economist at TD Bank.

That could increase the likelihood that the Federal Reserve will begin raising short-term interest rates from historic lows as early as next month, added David Chalupnik, head of equities at Nuveen Asset Management.

“Historically, hiking interest rates would not be good for the stock market, but at this point it’s a psychological boost that the economy is self-sustaining enough that the Fed could get off the zero interest rate policy,” Chalupnik said.

In other economic news, the Federal Reserve said that U.S. manufacturing output rose 0.4 per cent in October, the first gain in three months, as factories cranked out more steel, cars and computers.

The rise suggests that U.S. manufacturers may be overcoming challenges they have faced for most of this year, including a high American dollar and slow overseas growth.

— With files from the Associated Press

Note to readers: This is a corrected story: A previous version incorrectly put the Nasdaq close at 4,986.02