The Toronto stock market registered a sharp decline for a third session Tuesday, led by sliding base metal and financial stocks as investors took in mixed earnings reports.
Soon before the closing bell, the S&P/TSX composite index was down 158.81 points, or 1.4%, to 11,076.07.
But with the TSX still up almost 50% from the lows of early March, analysts weren't surprised to see some retracement.
The financials sector was the biggest TSX decliner, as TD Bank lost $1.83 to $62.66 and Royal Bank stepped back $1.59 to $54.07.
The market found limited support from the telecom sector following better-than-expected earnings from Rogers Communications
Rogers shares were up $1.23 to $30.13 after the telecom company reported quarterly net income of $485 million or 79 cents a share, compared to year-earlier earnings of $495 million or 78 cents a share. After adjustments, net income totalled $505 million or 82 cents a share, up from 73 cents a year earlier and well above analyst expectations of 54 cents per share.
Revenue at the wireless division was up seven per cent, fuelled by growth in postpaid subscriptions attributed to the popularity of the Apple iPhone.
But the industrials sector fell as Canadian Pacific Railway Ltd. said that third-quarter net income rose to $195.4 million or $1.16 cents a share, up from $170.7 million or $1.10 cents a share a year ago. However, revenue fell to under $1.1 billion from over $1.3 billion a year ago and its shares fell $2.02 to $46.71.
The TSX base metals sector declined as December copper drifted 0.12 of a cent lower at $3 U.S. a pound. Teck Resources lost 86 cents to $33.20.
The gold sector, too, was off, as Goldcorp Inc. faded 52 cents to $40.43.
In other corporate news, utility TransAlta Corp. said net income rose to $66 million or 34 cents per share in the third quarter, up from $62 million or 31 cents per share in the year-earlier period. Revenue fell to $666 million from $791 million and its shares were off three cents to $21.02.
Kinross Gold Corp. shares were $1.25 to $20.40 as the company cut its production guidance for 2009 on Monday due to lower than expected results from its operations in Brazil due to continuing problems at its Paracatu mine. The gold miner said it expected to produce 2.2 million gold equivalent ounces at an average cost of sales per ounce of $435 to $450 U.S. for 2009.
Lululemon Athletica Inc. shares jumped $2.46 or 8.98% to $29.85 after the athletic clothing retailer raised its earnings guidance for its third quarter due to better than expected sales.
The number of Canadian receiving regular Employment Insurance benefits in August fell 2.4% from July, the second consecutive monthly decline, official data showed Tuesday.
The Canadian dollar was ahead 0.20 cents to 93.78 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups finished the day down. Metals and mining stocks were off 2.8%, while financials and global base metals were down 2.6%.
The sole gainer was telecoms, ahead 2.1%.
The TSX Venture Exchange eked out a gain of 0.51 points to 1,306.46, while the Nasdaq Canada index lost 16.09 points to 676.16.
ON WALLSTREET
In New York, the Nasdaq slumped and the Dow managed a slim gain Tuesday, as investors weighed a selloff in tech, a rally in energy and a surprise drop in consumer confidence. A better-than-expected housing market report and a strong response to the government's latest debt auction were also in the mix.
The Dow Jones Industrials moved up 14.21 points to 9,882.17. The S&P 500 index slipped 3.54 points to 1,063.41. The Nasdaq composite index fell back 25.76 points to 2,116.09.
Weakness in banks, techs, retailers and transportation stocks dragged down the Nasdaq and limited the rest of the market from moving much. Cisco, Dell, Amazon.com and Yahoo were among the Nasdaq's biggest decliners.
A rally in heavily weighted Dow components Chevron, Exxon Mobil, DuPont, Wal-Mart Stores and Coca-Cola kept the Dow afloat.
Stocks tumbled Monday, with the Dow dropping 100 points for the second day in the row. A spiking dollar dragged on commodity shares and other stocks that benefit from a weak U.S. currency.
The dollar and commodity prices remained in focus Tuesday. But investors also looked to the economic news ahead of Thursday's highly anticipated gross domestic product growth report.
Energy was the strongest sector on the day as investors reacted to a smattering of financial reports and the impact of the U.S. dollar.
European oil behemoth BP reported weaker quarterly earnings and revenue due to lower oil prices, but the results topped analysts' estimates. BP's U.S. traded shares rose 5%.
Valero Energy, the largest U.S. oil refiner, reported a bigger-than-expected quarterly loss Tuesday, with fuel demand suffering amid the sluggish economy. Shares fell 4%.
Nonetheless, a variety of energy stocks rallied, including, as indicated, Dow components Chevron and Exxon Mobil.
Raw commodity prices were higher as well, despite a mixed dollar. Typically a weak dollar boosts dollar-traded commodity prices and a strong dollar pressures prices.
With 230 companies, or 46%, of the S&P 500 having already reported results, profits are on track to have fallen 18.1% from a year ago, according to the latest from Thomson Reuters.
Results have largely topped forecasts, with 80% of companies beating earnings' estimates, 6% meeting expectations and 13% missing forecasts.
On the economic front, consumer sentiment took a surprise plunge in October, according to a Conference Board report released after the start of trading. The Consumer Confidence index fell to 47.7 in October from a revised 53.4 in September. Economists surveyed by Briefing.com thought it would rise to 53.5.
The part of the index that measures how consumers rate the present economic situation fell to 20.7 in October from 23 in September. It was the lowest level since February 1983 when it stood at 17.5.
Elsewhere, the Case-Shiller Home Price Index of 20 cities showed the fourth straight month-over-month increase on a non-seasonally adjusted basis.
Home prices in the S&P index rose 1.2% in August, following a 1.6% price gain in July.
Treasury prices shot up almost a full point, lowering the yields for the benchmark 10-year note to 3.45% from Monday’s 3.56%. Prices and yields move in opposite directions.
The price of a barrel of oil regained 87 cents to $79.33 U.S.
Gold prices were down seven dollars at $1,035 U.S. an ounce.
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