Canadian stocks fell for the first time in seven days, as declines by gold producers outweighed a rise in oil and base-metal shares after U.S. President Barack Obama agreed to extend tax cuts.
The S&P TSX Composite Index closed the day down 25.34 points to 13,250.67.
The loonie was down 0.61 cents at 98.83 cents U.S.
Kinross Gold Corp., Canada’s third-biggest gold producer, dropped 2.5% to $18.88 as the metal retreated from a record.
Suncor Energy Inc., the country’s largest oil company, gained 1.6% to $36.64 as Obama agreed to support a two-year extension of Bush- era tax rates for high-income taxpayers.
Bank of Nova Scotia, Canada’s third-largest lender by assets, declined 1.9% to $55.03, after surging 4% over the previous two days.
The Canadian benchmark had gained 2.5% this month through yesterday as the U.S. dollar fell 2% against a basket of world currencies, boosting commodity prices.
The Bank of Canada today announced it is keeping its key interest rate at 1% and hinted that rates will not move up until the economy shows significant improvement.
ON BAYSTREET
The TSX/Venture Exchange eased 10.52 points to 2,117.21, while the Nasdaq Canada index lost 12.34 points to 767.10
In Toronto, losing and gaining groups were evenly split. Metals and mining stocks were the champion of the gainers, adding 1.9%, while global base metals progressed 1.2% and energy tacked on 0.4%.
Of the seven laggards, gold took the biggest hit at 1.8%, with materials next at 1.3% and telecoms off 0.7%.
ON WALLSTREET
In New York, stocks moved lower Tuesday, giving back healthy gains, even as investors welcomed a compromise between President Obama and Republican lawmakers that would extend the Bush-era tax cuts for two years.
The Dow Jones Industrials slumped 3.03 points by the closing bell to 11,359.20.
The S&P 500 moved up 0.63 points to 1,223.75. The Nasdaq Composite Index gained 3.57 points to 2,598.49.
U.S. markets rallied after President Obama, on Monday, announced a deal with Republican leaders that would extend Bush-era tax cuts for two years and unemployment benefits for 13 months. It would also lower the payroll tax by two percentage points for a year.
Late Monday, President Obama announced a deal with Republican leaders that would extend Bush-era tax cuts for two years and unemployment benefits for 13 months. It would also lower the payroll tax by two percentage points for a year.
On Monday, major indexes ended mixed after drifting around breakeven for most of the day. Investors spent most of the day mulling over Federal Reserve chairman Ben Bernanke's pessimistic comments about the nation's economy.
While stock investors sat on the sidelines, commodities surged Monday. That rally continued Tuesday morning with gold hitting a fresh intraday high, oil topping $90 U.S. a barrel for the first time in more than two years, and silver prices hitting another 30-year high.
Commodities have been on a tear as investors see increased demand from countries like China.
They're also being used a hedge against inflation and moving higher on the back of the weakening dollar, according to some experts.
The Treasury Department said Monday afternoon it planned to sell 2.4 billion Citi common shares, priced at $4.35 U.S. a share.
That gives the government a $12-billion U.S. profit, including dividends and interest payments, on its $45-billion U.S. Citi bailout. Company stock rose 19 cents, or 4%, to $4.64 U.S. per share.
3M said it expects full-year earnings will be between $5.90 and $6.10 U.S. per share in 2011, on sales of up to $30.5 billion U.S. Analysts had been expecting earnings of $6.20 U.S. per share, according to consensus estimates from Thomson Reuters. Shares of the company were down 2.5%.
AGL Resources and Nicor Inc. announced a merger creating a leading U.S. natural gas distribution company. The combined company will be known as AGL Resources. Shares of AGL were down 4%, while shares of Nicor rallied 5%.
Economically speaking, a report on consumer credit Tuesday afternoon is forecast to show a decline of $2.5 billion U.S. in October, following a gain of $2.1 billion U.S. in the previous month.
The price on the benchmark 10-year U.S. Treasury dropped sharply, lifting the yield to 3.16% from Monday’s 2.94%. Treasury prices and yields move in opposite directions.
Oil backtracked 50 cents a barrel to $88.32 U.S.
Gold futures for February delivery fell $6.10 to $1,410 U.S. an ounce, after reaching a new intraday high of $1,432.50 U.S. earlier in the session. Gold settled at a record $1,416.10 U.S. an ounce Monday.
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