It was a calm day for the Canadian market as the S&P TSX Composite (^GSPTSE) stayed within 0.3% of its opening throughout trading hours, finally closing at down a negligible 0.02%. This indifferent performance comes after European markets closed down for the day, with the FTSE 100 down 0.5%. and the S&P 500 index staying within a tight range as well, ending up 0.26%
Causing this performance were an array of economic moves. In the US, initial claims for jobless benefits last week rose slightly more than expected, but this move was offset also by durable goods orders in June coming in 2.5% higher than expected, at 4.2%.
Gold, and the SPDR Gold Trust, had a strong day up 0.92%, driving Barrick Gold Corp (TSX:ABX) 2% higher after yesterday’s 5% drop. Barrick Gold was also up on a recent announcement of a plan to sell its subsidiary, Barrick Energy, for a total of $455M. This sale represents 2.5% of Barrick Gold’s market cap.
There was also a lot of negative movement today in the Canadian gold mining space, however, as Goldcorp and Agnico-Eagle missed earnings estimates as profiled in this earlier Fool.ca post. Goldcorp, a major constituent of Canada’s TSX Composite, ended the day down 1%.
Natural gas stocks were also buzzing as the US Energy Information Agency released data showing that gas in storage had increased 1.4% from the previous week. Enbridge (TSX:ENB) began the day falling 75 basis points before recovering to roughly match the S&P TSX’s neutral performance, finishing up 0.45%. Similarly, Canadian Natural Resources (TSX:CNQ), which represents 2.65% of the S&P TSX index ended the day up 0.27%.
Individual Stocks Driving The Global Marketplace
In the earlier mentioned Motley Fool Article, Potash Corp’s earning miss was profiled as the company dragged on the TSX index with a 2% drop.
However, today’s real market news was with regard to two technology companies. Facebook surprised investors everywhere as the company beat analyst EPS estimates by 35%, grew daily average users by 27%, and most importantly, proved that it could monetize its mobile users by getting 41% of its revenue from the mobile side. The company finished its monster day up almost 30%. Baidu, China’s search engine giant, also added a record 58,000 active customers, finishing the day up 11%.
While gold prices rose and natural gas supply inched higher, the Canadian Markets were calm and satisfied on Thursday while global internet companies stole the show.
Foolish Takeaway
Once again, resources had a significant impact on our market’s performance. Because of their heavy-weightings in the TSX, these stocks can be harmful for those investors that think they are well-diversified with an index fund or ETF linked to the S&P/TSX Composite Index.
We have prepared a Special FREE Report that will clue you into the perils of passively investing in the Canadian index and suggests an easy to implement alternative strategy. The report is called “5 Stocks That Should Replace Your Canadian Index Fund”. One of these 5 is in the process of being taken over at a huge premium. You can find out who the remaining 4 are simply by clicking here.
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This post was created by Fool contributor Nikhil Shamapant.
Fool contributor Nikhil Shamapant does not own shares in any companies mentioned at this time. David and Tom Gardiner own shares of Facebook and Baidu. The Motley Fool owns shares of Facebook and Baidu.
