The Toronto stock market was lower Thursday afternoon after cautious words from the U.S. Federal Reserve and mixed economic data deepened pessimism about the economic rebound in the world’s biggest economy.
The S&P TSX Composite Index ended the day lower by 137.22 points, or 1.2%, to 11,670.18
Financials were down as Finance Minister Jim Flaherty said countries calling for a global bank tax are not focusing on the most fundamental issues in worldwide financial reform.
He said Thursday that there won’t be such a tax imposed during the G20 summit because the majority of the countries in the group didn’t want it.
CIBC lost $1.76 to $72.55 while Bank of Montreal gave back $1.44 to $60.32.
Manulife Financial’s chief executive says the company is interested in picking up the Asian life insurance unit of U.S. insurer AIG. The comment from Don Guloien comes after the collapse of a $35.5-billion U.S. deal for Prudential PLC to take over American International Assurance Ltd.
He added that "people can be comfortable, though, that we would not be approaching that deal at any price approaching $35.5 billion." Manulife shares were down eight cents at $16.32.
The TSX energy sector fell as Suncor Energy stepped back 72 cents to $33.32 while Imperial Oil lost 68 cents to $40.45.
Among gold issues, Barrick Gold Corp. gained 11 cents to $46.57.
The base metals sector was down even as the July copper contract was up seven cents to $3.01 U.S. a pound. HudBay Minerals fell 54 cents to $12.22 as the acting chief executive of the zinc and copper miner told shareholders the company plans to expand its operations beyond its Manitoba base.
Teck Resources lost $1.09 to $34.58.
Shares in Research In Motion Ltd. were 72 cents lower to $61.29 ahead of earnings from the BlackBerry maker after the close. The average analyst estimate for RIM’s earnings per share for the company’s first quarter of 2011 is $1.33 U.S. and revenues are expected to be $4.3 billion U.S., according to those surveyed by Thomson Reuters.
In other corporate news, Magna International Inc. shares were ahead 74 cents to $73.18. The Ontario Securities Commission said Thursday that it would deliver a ruling after the markets close about whether a proposal that would see founder Frank Stronach receive hundreds of millions of dollars to give up his voting control of the company can go ahead.
Magna said Thursday that holders representing 57.4% of its total outstanding shares have voted to approve the controversial plan.
Goldcorp Inc. of Vancouver says there’s "no basis" for closing its Marlin mine while the Guatemalan government conducts what it calls an "administrative process" to deal with allegations that the rights of local people have been violated.
The Vancouver-based miner says the Guatemalan government agrees that studies by several of its ministries have found no evidence the mine has contaminated the water supply or caused disease. Its shares lost 27 cents to $46.14.
Colossus Minerals Inc. shares jumped 67 cents to $7.94 after it said it has discovered two new mineralized zones at its Serra Pelada joint venture property in Brazil, where the Toronto-based company is exploring for gold, platinum and palladium.
The G20 summit, to be held this weekend in Toronto, will focus on economic issues including banking regulation reform, changes in representation of multilateral organizations, international trade imbalances, and the phase-out of fossil fuel subsidies. The summit on June 26-27 will be attended by leaders from the 20 developed and developing nations.
The Canadian dollar shed 0.40 cents to 95.85 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups lost ground on the day. Global base metals slid 3.1%, while metals and mining tailed off 3% and information technology descended 1.8%.
The one exception was the health-care group, 0.9% stronger.
The TSX Venture Exchange subtracted 4.14 points to 1,451.75 while the Nasdaq Canada index stumbled 11.31 points to 667.44
ON WALLSTREET
In New York, equities slipped Thursday, with the Dow losing more than 100 points, as investors mulled mixed reports on the economy and a selloff in bank shares as Wall Street reform talk move toward a close.
The Dow Jones industrial average moved 145.64 points, or 1.4%, lower to 10,152.80
The S&P 500 index eased 18.35 points to 1,073.69. The Nasdaq composite index fell 36.81 points to 2,217.42.
Stocks fell after reports showed a still-tough environment for the manufacturing and labour markets and one day after the Federal Reserve sounded a cautious tone on the economy.
The Fed issued a cautious growth outlook Wednesday on the back of the day's weak May new home sales report. That left stocks mixed to lower, but the tone turned even more negative overnight, with markets in Europe falling and U.S. stocks opening weaker.
One expert said that markets are likely to be particularly volatile in July, as the second-quarter reporting period heats up, with many forecasts still too high relative to the current economic outlook.
Thousands of Apple fans lined up Thursday morning to buy the hugely anticipated iPhone 4, which is being released at Apple stores and other retailers Thursday including Wal-Mart Stores and Best Buy.
Google won a crucial copyright infringement battle with Viacom Wednesday when a federal court ruled Google's YouTube isn't liable for its users' copyright violations. Viacom, which has been seeking more than $1 billion in damages, says it will appeal the ruling.
Oracle shares dipped ahead of its quarterly profit report, due out after the close. The software maker is expected to earn 54 cents U.S. per share, up 17% from a year earlier, and revenue of $9.5 billion U.S., up 38% from the prior year.
Declines were broad-based, with 26 of 30 Dow issues falling. The biggest losers were Chevron, Exxon Mobil, Walt Disney, IBM, Hewlett-Packard and 3M.
Investors in financial services issues will be keeping an eye on developments in Washington as House and Senate negotiators attempt to complete work on a Wall Street reform bill.
Economically speaking, a report from the Department of Labor showed that the number of Americans filing new claims for unemployment fell to 457,000 in the week ended June 21.
This was slightly lower that the 460,000 claims that were expected. It was also significantly lower than the 476,000 claims for the prior week, which were revised up from the original figure of 472,000.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, dropped to 4,548,000, which was lower than the 4,580,000 that were expected and down from the 4,571,000 that were reported for last week.
The Commerce Department reported that orders for durable goods were down 1.1% in May, which was better than expected. Orders were expected to have fallen 1.3% after rising 2.8% in April, according to a consensus of economists surveyed by Briefing.com.
Orders excluding transportation rose 0.9%, which was less than the expected rise of 1.3%.
Treasury prices slid a bit, raising the 10-year note's yield to 3.12% from Wednesday’s 3.11%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil was fairly flat at $76.35 U.S.
Gold prices added $6 to $1,241 U.S. an ounce.
Related Stories
