The Toronto stock market was lower Wednesday as Research In Motion Ltd. stock fell following the launch of its long-awaited BlackBerry 10 products and data showed a surprising weakening of the U.S. economy in the fourth quarter.
The S&P/TSX Composite Index surrendered early gains and gave back 36.12 points to conclude trading Wednesday at 12,794.44
The Canadian dollar backtracked 0.03 cents to 99.86 cents U.S.
RIM had been up as much as 4% before chief executive Thorsten Heins unveiled the BB10 and announced the company's corporate name would be changed to BlackBerry at a widely covered event in New York City.
But by the close, RIM stock was down $1.91, or 12.2%, to $13.80 on very heavy volume of 22.5 million shares, adding to declines over the past two sessions — 3.4% Tuesday and a 7.6% drop on Monday.
Analysts said the decline in RIM stock — viewed as profit taking after rising from a fresh 52-week low of $6.10 last September — didn't amount to much and that consumer reaction to the new product will determine where the stock goes.
Montreal-based IT services company CGI Group Inc. says its first-quarter revenue more than doubled to $2.53 billion, up 147.5% from a year earlier and its shares gained $2.03 or 8.4% to $26.32.
Potash Corp. of Saskatchewan is raising the cash dividend it pays to shareholders by 33% to 28 cents a share. Its shares were up 12 cents to $43.19.
In the industrials sector Canadian Pacific Railway was down $1.47 to $114.75 after surging Tuesday in the wake of a well-received earnings report.
Telecoms also weighed on the TSX with Rogers Communications down 48 cents to $46.57.
The base metals component lost ground even as March copper on the Nymex gained six cents to $3.75 U.S. a pound. HudBay Minerals rose 13 cents to close at $11.65.
Bloomberg reported that Rio Tinto Group, the world's second-biggest mining company, is considering a temporary halt to construction work at its $6.2-billion U.S. Oyu Tolgoi copper and gold project in Mongolia as the government demands a greater share of profit from the mine.
Rio has a 66% stake in Oyu Tolgoi through its 51% interest in Vancouver-based Turquoise Hill Resources Ltd., formerly known as Ivanhoe Mines Ltd. Turquoise Hill shares fell 28 cents to $7.87.
The energy sector was flat and Athabasca Oil gained 18 cents to $10.68.
Among gold issues, Goldcorp Inc. dipped eight cents to $36.03.
ON BAYSTREET
The TSX Venture Exchange subsided 9.57 points to 1,222.35
All 14 Toronto subgroups had fallen into the red on the day, weighed mostly by information technology, off 1.2%, while global base metals subsided 1.1%, and the metals and mining group erased 1%.
ON WALLSTREET
U.S. stocks slid Wednesday after the Federal Reserve left interest rates unchanged and said economic growth had paused.
The Dow Jones Industrial Average jettisoned 44 points to 13,910.40
The S&P 500 fell 5.92 points to 1,501.92. The tech-heavy NASDAQ Composite dumped 11.35 points to 3,142.31
On the corporate front, Research in Motion shares tumbled as the company announced the long-awaited BlackBerry 10. RIM is hopeful that its new operating system and devices will change its fortunes in the smartphone market. The company also announced that it is changing its name to BlackBerry, reflecting its big bet on new operating system.
Boeing, which has been dogged over the past few weeks by problems with its now-grounded 787 Dreamliner fleet, topped fourth-quarter earnings forecasts. The aircraft maker says it does not expect a significant financial impact from the grounding of the 787s.
Oil producer Phillips 66 shares rose after the company's beat earnings expectations. Shares of Amazon gained 5% after the company delivered a 22% jump in fourth-quarter sales late Tuesday. Facebook headlines the list of companies reporting after the close.
Shares of Chesapeake Energy surged 8% after the natural-gas producer announced late Tuesday that embattled CEO Aubrey McClendon will retire in April.
Stocks, which have largely straddled the breakeven line for most of the day, remain near all-time highs. The Dow is less than 2% away from its record high of 14,198.10 reached in October 2007, while the S&P 500 is less than 5% away from its record high of 1,576.09, also reached in October 2007.
On the economic front, U.S. gross domestic product declined 0.1% last quarter, marking the first year-over-year contraction since the second quarter of 2009. The drop, largely due to a 22% decline in defense spending, was a big surprise, as analysts were expecting that the economy grew 1% last quarter, according to a consensus estimate of economists
Meanwhile, payroll processor ADP said private employers added 192,000 jobs in January, higher than the 175,000 jobs that analysts were expecting. The ADP report is the first of three this week to provide a snapshot of nation's job market.
Investors took any down notes in stride, likely because the Fed assured the market that it will keep its bond-buying program in place indefinitely.
And while the GDP contraction is a "shock," experts say it is also likely an exaggeration of the economy's weakness.
Wednesday's GDP report is the Commerce Department's first estimate for the fourth quarter and it will be revised twice over the next two months
Prices on the 10-year U.S. Treasury fell, raising yields to 2.01% from Tuesday’s 1.99%. Treasury prices and yields move in opposite directions.
Oil prices vaulted 49 cents to $98.06 U.S. a barrel.
Gold prices added $14.70 to $1,675.50 U.S. an ounce.
Related Stories
