Canadian stocks fell for a second day as the U.S. dollar rose and metal prices dropped after Moody’s Investors Service said it might cut Spain’s credit rating.
Toronto’s S&P/TSX composite index fell back 51.61 points to end the day at 13,229.07, after Moody’s said it may reduce Spain’s credit rating by one or two levels from Aa1.
The Canadian dollar gained 0.24 cents to 99.58 cents U.S.
The S&P/TSX is outgaining the S&P 500 for the seventh straight year due in part to a 34% surge in the Canadian benchmark’s raw-materials stocks through yesterday. Gold jumped 28% over 2010, on concern that central-bank efforts to boost the money supply will fuel inflation, while copper soared 26% as the Chinese economy grew faster than 10% for the first three quarters of the year.
Barrick Gold dropped 1.5% to $52.75. Agnico-Eagle Mines Ltd., Canada’s fifth-largest gold producer, declined for a seventh day, slumping 2.6% to $80.79. Silver reseller Silver Wheaton Corp. lost 2.5% to $38.07.
Copper fell from a 31-month high in New York. Teck Resources declined 2.3% to $56.54. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, lost 2.7% to $111.92.
Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, fell 1.2% to $42.50 Nexen Inc., an oil and gas producer with operations on five continents, dropped 1.8% to $22.03. Pacific Rubiales Energy Corp., which produces oil in Colombia, declined 3.7% to $32.28.
TD and Royal Bank, which derive a higher portion of their revenue from the U.S. than do any other Canadian banks, retreated as the Canadian dollar gained for a sixth day against its U.S. equivalent.
TD decreased 1.1% to $72.68. Royal Bank of Canada, the largest Canada-based bank, slipped 0.7% to $52.00
BlackBerry maker Research In Motion Ltd. fell 2.3% to $59.48. The company is scheduled to report third-quarter earnings tomorrow.
On the economic ledger, StatsCan said this morning that manufacturing sales hiked 1.7% in October to $45.5 billion, mostly on the strength of the petroleum and coal products, primary metals and motor vehicle industries.
ON BAYSTREET
The TSX Venture Exchange lost 16.76 points to 2,100.94, while the Nasdaq Canada index reversed 13.43 points to 744.58
In Toronto, eight of the 14 subgroups were negative on the day. Gold was and global base metals slid 1.8% each, while metals and mining stepped back 1.7%.
The six gainers were led by health-care, up 1.3%, while utilities were ahead 0.8%, and consumer staples picked up 0.6%.
ON WALLSTREET
In New York, stocks languished Wednesday, but December has been a good month for U.S. stocks, so this week's lackluster action isn't upsetting investors much. Stocks have managed to eke out gains over the past few sessions and are up 5% for the month.
The Dow Jones Industrials faded 19.07 points by the closing bell to 11,457.50
The S&P 500 eased 6.36 points to 1,235.23. The Nasdaq Composite Index tumbled 10.50 points to 2,617.22
Unless there's some major news to drive investors to the sidelines, experts say it looks like all three major indexes will see double-digit percentage gains for the year. In Wednesday's session, investors weighed worries about a possible Spain downgrade with relatively upbeat U.S. inflation data.
Investors are also looking for Congress to extend the Bush-era tax cuts. The Senate approved the controversial $858-billion U.S. tax package Wednesday, despite a series of objections from both the left and the right. The measure, which passed 81-19, now advances to the House of Representatives.
Moody's said it might downgrade Spain's local and foreign currency government bond ratings, citing high refinancing needs in 2011 among other issues. That sent the IBEX, Spain's main stock index, down about 1.4%.
Switzerland-based Novartis announced a deal to buy the remainder of eye care company Alcon for $12.9 billion U.S. Shares of Alcon were up almost 1.6% in late trade.
Boston Beer, the brewer of Sam Adams and other beers, raised its earnings forecast for the remainder of this year and into 2011. Shares surged 12.8%.
Economically speaking, consumer prices rose at a seasonally adjusted 1.1% on an annual basis, the Labor Department said Wednesday.
The Consumer Price Index -- the government's main inflation gauge -- increased 0.1% in November, slightly less than the 0.2% rise economists were expecting. Meanwhile, the core CPI -- excluding food and energy -- increased 0.1% in November, in line with expectations.
The price on the benchmark 10-year U.S. Treasury fell back, thus raising the yield to 3.52% from Tuesday’s 3.45%. Treasury prices and yields move in opposite directions.
Oil gained 24 cents a barrel to $88.52 U.S.
Gold futures for February delivery fell $18.10 to settle at $1,386.20 U.S. an ounce.
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