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By Blaise Robinson
Reuters
Friday, January 20, 2006
TORONTO (Reuters) - Toronto stocks closed lower on Friday, dragged down by a plunge in U.S. shares on concern over slower-than-expected profit growth, but higher oil prices helped limit the fall.
Adrian Mastracci, investment counsel at Vancouver’s
‘fee-only’ KCM Wealth Management, says, "Quarterly earnings in the United States are in fact pretty strong, but expectations are too high.”
The Toronto Stock Exchange's S&P/TSX composite index closed down 87.30 points, or 0.75 percent, at 11,605.67.
The benchmark Toronto index started the session in a positive mood, touching a high of 11,760.32, before sliding into the red. It closed the week with a meager gain of 0.85 points.
In New York, stocks suffered their biggest loss in nearly three years, plummeting on disappointing earnings from Citigroup Inc. and General Electric Co.
The two blue chip firms joined a growing list of companies, including chip maker Intel Corp. and mobile phone maker Motorola whose quarterly results have disappointed investors.
The Dow Jones industrial average was down 213.32 points, or 1.96 percent, at 10,667.39, while the Nasdaq Composite Index was down 54.11 points, or 2.35 percent, at 2,247.70.
Adrian Mastracci, investment counsel and president at KCM Wealth Management Inc. said quarterly earnings in the United States are in fact pretty strong, but expectations are too high.
"If you're expecting 17 percent (profit growth) and you get only 13 percent, you haven't done well. But the truth is 13 percent is still pretty good," Mastracci said.
Technology shares were by far the biggest losers on the TSX, falling 4.07 percent along with their U.S. peers on the earnings disappointments.
Nortel Networks dropped 19 Canadian cents, or 5.21 percent, to C$3.46, while Celestica tumbled 90 Canadian cents, or 7.07 percent, to C$11.83.
"It's just a general pull-back in the technology sector... Every name I cover is unfortunately in the red. I don't think I have a green name on my screen today," said Longbow Research analyst Shawn Harrison.
Toronto's heavily weighted energy subindex pulled in the other direction, gaining 0.22 percent on rising oil prices.
U.S. crude oil futures ended $1.52 higher at $68.35 on Friday, their highest close in 4-1/2 months as severe winter weather hit Europe and concerns over possible disruption of oil flow from Iran and Nigeria continued to weigh.
Suncor Energy Inc. added C$1.98, or 2.42 percent, to C$83.74.
Overall, eight of the TSX's 10 main subindexes fell.
The industrials sector shed 1.44 percent, with SNC-Lavalin Group losing C$1.69, or 2.15 percent, to C$77.09.
Quebecor World Inc. sank 72 Canadian cents, or 4.91 percent, to C$13.93.
The commercial printer said late on Wednesday it will take a $243-million pretax impairment charge in the fourth quarter and cut its quarterly dividend to 10 cents per share from 14 cents per share.
The blue chip S&P/TSX 60 index closed 5.28 points lower, or 0.8 percent, at 651.61.
Overall volume was a heavy 348 million shares worth C$5.7 billion.
($1=$1.15 Canadian)
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