BloombergCanadian Stocks Fall, Led by Toronto-Dominion Bank, Bombardier
Aug. 26 (Bloomberg) -- Canadian stocks fell, led by Toronto- Dominion Bank, after the nation's second-biggest lender said it would buy a controlling stake in Banknorth Group Inc. for $3.8 billion in cash and stock.
Bombardier Inc. had the biggest drop in the benchmark index. Analysts trimmed the stock's price target a day after the world's No. 3 maker of commercial airplanes reported a smaller-than- expected profit.
The Standard & Poor's/TSX Composite Index lost 40.03, or 0.5 percent, to 8331.34, for its first decline in three days. The measure advanced as much as 8.3 percent this year, setting a high on April 12. Since then, it has dropped 6.4 percent.
``There's a fear that economic growth will slow down,'' said Michael Sprung, who helps manage the equivalent of $9.92 billion for YMG Capital Management Inc. in Toronto. ``People want to see more evidence of what the economy will look like next year.''
The U.S. Commerce Department tomorrow may lower its second- quarter economic growth figure because higher-priced oil imports widened a trade deficit, according to economists.
The U.S. economy may have grown at a 2.7 percent annual rate between April and June, according to the median of 67 estimates in a Bloomberg survey. The government on July 30estimated 3 percent growth.
Toronto-Dominion
Toronto-Dominion fell 97 cents to C$43.58, accounting for 16 percent of the benchmark index's drop. The bank agreed to buy a 51 percent stake in Portland, Maine-based Banknorth for $3.8 billion in cash and stock.
The shares dropped 3.2 percent yesterday after the bank said it was negotiating with Banknorth. Toronto-Dominion has assets of about $29 billion and about 360 branches, mostly in New England and New York, according to its Web site.
Bombardier slumped 23 cents, or 7.9 percent, to C$2.70. At least nine analysts cut their expectations for the stock's price a year from now, including UBS's Peter Rozenberg. In a note to clients, Rozenberg said he expects earnings of 10 U.S. cents a share next year, lower than an earlier forecast of 18 cents.
Bombardier said yesterday that fewer deliveries of planes cut profit in the second quarter to 1 cent a share. The company was expected to earn 2 cents, the average analyst estimate according to Thomson Financial.
``It's one disappointment after another with Bombardier,'' Sprung said. ``There's been a strong business jet market and that didn't seem to help them very much.''
Semiconductor Shares
All four of the S&P/TSX Composite's semiconductor shares fell, tracking declines in U.S. rivals. Banc of America Securities LLC analyst John Lau wrote in a note to clients that demand for chips has weakened earlier than he expected. Lau cited a combination of excessive inventory, slowing economic growth, terrorism concerns and record oil prices.
ATI Technologies Inc. declined 30 cents to C$19.45. Zarlink Semiconductor Inc. dropped 10 cents to C$3.90.
Tundra Semiconductor Corp. slid C$1.13 to C$15.30. Its 7.1 percent drop was the second-steepest in the S&P/TSX Composite. The Ottawa-based chipmaker reported profit of 15 cents a share, compared with the 19-cent Thomson estimate. For this quarter, Tundra said it will earn 19 cents to 20 cents, less than the 22- cent analyst estimate.
Crude oil futures extended their decline to a fifth day, dropping 0.7 percent to $43.15 a barrel in New York. A cease-fire in the Iraqi city of Najaf eased concern shipments from Iraq will be disrupted.
Futures for the S&P/TSX 60 expiring in September fell 2.4 to 462.90 in Montreal. The underlying index, which tracks Canada's largest stocks, dropped 3.09 to 463.42.
About 164.6 million shares traded on the Toronto Stock Exchange, 16 percent less than its three-month daily average. The value of shares traded totaled C$2.52 billion. There were 624 stocks that rose and 575 that fell.
These stocks made significant gains or losses. The stock symbol is after the company name.
Bennett Environmental Inc. (BEV CN) fell 18 cents, or 2.6 percent, to C$6.75, the third-biggest decline in the S&P/TSX Composite. The contaminated-soil treatment company announced the resignation of John Bennett as chairman of the board in a CCNMatthews news release. He will remain a director of the company. David Williams succeeded Bennett as chairman.
QLT Inc. (QLT CN) rose C$1.72, or 8.1 percent, to C$22.98. The maker of the Visudyne drug for age-related degeneration gained the most in the TSX/Composite. Rival Eyetech Pharmaceuticals Inc.'s Macugen drug, used to treat the leading cause of blindness among the elderly, may cause complications that deserve further consideration, U.S. regulators said in a report.
ATI Technologies Inc. (ATY CN)
Bombardier Inc. (BBD/B CN)
QLT Inc. (QLT CN)
Toronto-Dominion Bank (TD CN)
Tundra Semiconductor Corp. (TUN CN)
Zarlink Semiconductor Inc. (ZL CN)
To contact the reporter on this story:
Matt Mossman in Toronto at at mmossman@bloomberg.net
To contact the editor responsible for this story:
Phil Serafino at pserafino@bloomberg.net.