Toronto stocks were modestly lower in Tuesday afternoon trading, following the lead of U.S. markets. Mining stocks led the weakness on Bay Street.
The S&P/TSX Composite Index faded 39.83 to 10,500.88, ending the index’s winning streak at six sessions.
Mining stocks sank as copper prices turned notably lower on the Comex. First Quantum plunged 7.3% to $64.58, Inmet was down 3.6% at $44.19 and Teck Resources slipped 0.1% to $24.30.
Industrial stocks were up as Canadian National Railway added 2.1% to $50.54 after the company reported second-quarter net income of $0.76 per share, compared to $0.90 per share a year ago. Rival Canadian Pacific Railway is up 3.5% to $43.35.
Canadian Hydro Developers was flat at $4.90 after its price target was increased to $5 from $4.50 at Credit Suisse. Shares were downgraded to Neutral from Outperform.
Kirkland Lake Gold dropped 1.4% to $7.95 despite reporting a rise in fourth quarter earnings to $2.3 million compared to $906,000 last year. Revenues for the quarter were $18.2 million.
Research In Motion Limited slipped 1.5% at $81.91 after the Blackberry maker said that it has been prevented from bidding for the Canadian telecom equipment maker Nortel Networks Corp.'s Wireless Business that has been placed into bankruptcy auction scheduled to occur on July 24.
Toromont Industries reported net income for the second quarter of $33.5 million or $0.51 per share, compared to $37.8 million or $0.58 per share in the year-ago quarter. Shares were up 0.8% to $23.19.
Orvana Minerals were flat at 70 cents after the company said it raised its all-cash offer for Kinbauri Gold to $0.75 per share from $0.55 per share.
The Bank of Canada on announced that it is maintaining its target for the overnight rate at a quarter-percentage point, as expected. The Bank Rate is unchanged at 0.5% and the deposit rate is 0.25%.
The Canadian dollar edged up 0.02 cents to 90.38 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, all but three ended the day negative. Metals and mining slid 2%, gold was off 1.3% and materials declined 1.2%.
The three gainers were industrials, up 2%, telecoms, ahead 0.8% and consumer discretionaries, advancing 0.7%.
The TSX Venture Exchange was off 3.45 points, to 1,114.64, while the Nasdaq Canada Index moved 6.71 points lower to 723.27
ON WALLSTREET
In New York, stocks hovered near the breakeven line Tuesday as investors weighed Federal Reserve Chairman Ben Bernanke's warning that the economic recovery would be slow with better-than-expected corporate earnings. They pulled ahead in the last hour of trading.
The Dow Jones Industrials extended its win streak to seven sessions, gaining 67.79 points, at 8,915.94. The S&P 500 index added 3.45 points to 954.58. The tech-rich Nasdaq composite regained 6.91 points, to 1,916.20.
Caterpillar was up 7%, paring earlier gains on its positive outlook, after executives warned in a conference call that waning demand would make for a tough third quarter.
The company, a gauge of the global economy, said that it is seeing signs of stabilization in the global economy, and that global stimulus efforts -- particularly in China -- are beginning to work.
For the second quarter, Caterpillar posted better-than-expected earnings on sales that fell short of expectations. However, the company said its third quarter would be tough and that it could post a loss for that period and that it would be forced to implement rolling plant closures.
Investors were paying close attention to financial reports from the second-quarter for a sense of how companies are managing to navigate the downturn.
Drugmakers Merck and the soon-to-be-acquired Schering-Plough announced second-quarter earnings before the bell. Merck reported earnings per share of 83 cents U.S. excluding charges, beating expectations of 77 cents U.S. from Thomson Reuters.
Schering reported 46 cents U.S. earnings per share excluding charges, which was close to estimates, and up slightly from 45 cents U.S. in the year-ago quarter.
Several companies are on tap to post financial results after the closing bell Tuesday, including Apple, Yahoo and Starbucks.
Investors were also watching troubled small business lender CIT which confirmed late Monday that bondholders had extended financing that will keep it afloat.
The market was generally pleased to see the private sector step up to the plate. But investors remain uncertain about how long the relief will last as the company faces a difficult restructuring.
Economically speaking, Fed chairman Bernanke, in prepared testimony before a House committee, said the pace of economic decline has "slowed significantly" but the labor market has gotten worse.
Prior to his testimony, Bernanke outlined his "exit strategy" from the current low interest rate policy in a Wall Street Journal guest column. Bernanke defended the aggressive roles of the Fed and its ballooning balance sheet in the current crisis, saying "These actions have softened the economic impact of the financial crisis."
Treasury prices shot sharply up, lowering the yield on the benchmark 10-year note to 3.48%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil hiked 74 cents to $64.73 U.S.
Gold prices were down $2 at $947 U.S. an ounce.
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