Toronto’s main index took a bit of a plunge Wednesday morning, as market concerns that the U.S. Federal Reserve might end its monetary easing policy offset data that showed euro-zone business activity eased at a slightly slower pace in May.
The S&P/TSX Composite Index tumbled 89.44 points to begin Wednesday at 12,504.53
The Canadian dollar inched higher by 0.08 cents to 96.62 cents U.S.
RBC raised the target price on Dollarama Inc to $81 from $76, expects strong underlying trends to be offset by weather-related disruptions due to traffic when the company reports its first-quarter results. Dollarama shares fell 58 cents to $73.57
RBC cut the target price on EXFO Inc. to $5.25 from $6, says preliminary results are disappointing, particularly following the prior two quarters of improvement. EXFO shares declined 28 cents to $4.40.
Telecom shares took the biggest battering of all the subgroups, as BCE got turfed 2% to $45.25.
Among industrials, railways were also prone to declines, as both CN and CP lost 2% each in price.
On the economic beat, Statistics Canada reported this morning that Canadian municipalities issued building permits worth $7.0 billion dollars in April, up 10.5% from March. The advance in April was the fourth consecutive monthly increase.
ON BAYSTREET
The TSX Venture Exchange eked up 0.21 points to at 959.11
All but four of the 14 Toronto subgroups were lower in the first hour of trading, weighed mostly by telecoms, down 1.5%, industrials, sliding 1.2%, and financials, declining 1%.
The four gainers were led by gold, up 1.4%, materials, gaining 0.5%. and information technology, increasing 0.4%.
ON WALLSTREET
Persistent worries about when the U.S. Federal Reserve will start tapering its bond buying program had investors on edge once again Wednesday.
The Dow Jones Industrials dropped 72.99 points to 15,104.50
The S&P 500 index shed 3.70 points to 1,627.68. The tech-rich NASDAQ Composite fell 18.71 points to 3,426.55.
Apple shares slipped in early trading after the International Trade Commission ruled that several older Apple products violate a Samsung patent and can't be sold within the United States.
Shares of Toyota dropped after the automaker recalled nearly a quarter million hybrids to fix brakes.
In economic news, payroll-processor ADP said the private sector added 135,000 jobs in May, less than the 157,000 economists were expecting.
The weak reading gave investors hope that the Fed, which currently buys $85 billion U.S. a month of mortgage-backed securities and Treasuries, won't pare back its bond buying program anytime soon.
The ADP report is typically considered a prelude to the U.S. government's closely watched monthly jobs report. That report is due before the bell Friday.
Prices for the 10-year U.S. Treasury pointed upward, lowering yields to 2.12% from Tuesday’s 2.13%. Treasury prices and yields move in opposite directions.
Oil prices took on 52 cents to $93.83 U.S. a barrel.
Gold prices jumped $7.50 to $1,404.70 U.S. an ounce
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