Toronto's main stock index was lower Tuesday, hit by a slide in gold and oil prices, after hitting its highest level in more than two years early in the session.
The S&P/TSX composite index fell 40.91 points to close at 13,402.31
The Canadian dollar was down 0.53 of a cent to $1.001 U.S.
The index finished 2010 with its best December in five years and a gain of 14.4% for the year.
Sentiment in Toronto was boosted by a move higher in most stock markets around the world after healthy global economic data on Monday. Markets were also lifted by the "January effect" in which fund managers are relieved of the need to settle end-of-year balances.
Barrick Gold Corp sank 2.9% to $51.59, and Goldcorp Inc shed 3% to $44.50.
Elsewhere in the gold field, Fronteer Gold Inc., which explores in the U.S., Turkey and Canada, sank 6.3% to $10.89.
Agnico-Eagle Mines Ltd., Canada’s fifth-largest gold producer, tumbled 6.4% to $71.72 after analysts at Royal Bank of Canada and Canadian Imperial Bank of Commerce cut their share-price forecasts on the stock.
Grande Cache Coal Corp., which mines in Alberta, soared 5% to $10.99 after earlier today climbing to a five-year high of $11.45. SouthGobi Resources Ltd., which produces coal in Mongolia, jumped 9.9% to $13.38.
Avalon Rare Metals Inc., which explores for rare-earth elements in Canada, surged 17.2% to $7.28 to bring its gain since Dec. 20 to 85%. Analysts at Dahlman Rose & Co. yesterday increased price forecasts for some rare-earth metals.
Magna International Inc., Canada’s largest auto-parts maker, increased 7.6% to $55.85 as General Motors Co. said U.S. sales climbed 7.5% in December.
Among energy plays, EnCana Corp., Canada’s biggest natural gas producer, rose 0.8% to $29.31. Penn West Energy Trust, which produces oil and gas in Canada, advanced for the first time in five days, increasing 2.8% to $24.50.
Manulife Financial Corp., North America’s fourth-largest insurer, rose 0.7% to $17.27. Sun Life Financial Inc., Canada’s third-biggest insurance company, gained 0.8% to $30.34. Fairfax Financial Holdings Ltd., which derives more revenue from the U.S. than from any other part of the world, increased 1.2% to $414 for a fifth-straight advance.
Oil and copper prices also retreated and the index's energy and base-metals groups pared gains but were still up.
Teck Resources Ltd., Canada’s biggest base-metals and coal producer, advanced 1.7% to $62.84 after the Institute for Supply Management’s gauge of U.S. manufacturing climbed to a seven-month high.
ON BAYSTREET
The TSX Venture Exchange scaled back 12.73 points to 2,275.12, while the Nasdaq Canada index slipped 4.32 points to 755.14.
In Toronto, all but three of the 14 subgroups were higher on the day. Health-care issues were 2.3% more robust, consumer discretionaries up 1.6%, global base metals ahead 1%.
The three laggards were gold, off 3.3%, while materials fell 1.7% and financials doffed 0.3%.
ON WALLSTREET
In New York, stocks pushed back toward breakeven Tuesday afternoon as investors mulled over the Federal Reserve's December minutes.
The Dow Jones Industrials reversed itself and finished in the green 20.43 points to 11,691.20.
The S&P 500 slipped 1.67 to 1,270.20. The Nasdaq Composite Index tailed off 10.27 points to 2,681.25.
The minutes from the Federal Reserve's latest meeting in December didn't bring any major surprises, but did show that the central bank's policymakers remain committed to their purchase of $600 billion in U.S. Treasurys as a means of stimulating the economy.
Anticipation of that stimulus policy, referred to as "quantitative easing" or "QE2," had fueled bullish stock market gains in the second half of 2010. Investors had grown concerned about whether the Fed will follow through with the full $600-billion U.S. program in 2011.
The minutes alleviated some of those fears.
Investors are also watching as major auto companies release their December sales figures throughout the day. General Motors was the first to report Tuesday morning, saying it ended a challenging 2010 with a bang.
GM's U.S. sales rose 8% in December from a year earlier -- the company's best sales month of the year. GM shares rose 0.5% after the news.
Ford Motor reported December sales were up 4% from a year ago.
Analysts surveyed by Briefing.com expect overall auto sales for December to drop to 3.7 million, from 3.8 million the previous month. Truck sales are expected to drop to 5.3 million from 5.5 million.
Motorola's long-awaited split into two separate companies went into effect at the start of trading Tuesday. The company's cell phone business now operates as Motorola Mobility Holdings Inc., under the stock symbol MMI. Motorola Solutions Inc., a company that makes other telecommunications gear, trades under MSI
Motorola Mobility shares debuted at $31.17 U.S., and Motorola Solutions shares started at $37.30 U.S.
Shares of BP rose 2.2% after London newspaper the Daily Mail reported Royal Dutch Shell previously considered making a bid for the oil giant during the Gulf oil spill. Royal Dutch Shell shares rose 0.7% in afternoon trading.
Borders Group stock fell 10.5% in afternoon trading, after the company announced late Monday that its general counsel Thomas Carney and Chief Information Officer D. Scott Laverty both resigned.
Economically speaking, the Commerce Department reported November factory orders rose 0.7% in November, following a 0.7% decrease in October. Analysts surveyed by Briefing.com had expected total orders to fall by 0.3% during the month.
Traders are also watching as major auto companies release their December sales figures throughout the day. General Motors was the first to report Tuesday morning, saying it ended a challenging 2010 with a bang.
GM's U.S. sales rose 8% in December from a year earlier -- the company's best sales month of the year. GM shares rose 0.9% after the news. Other automakers, including Ford Motor and Toyota are scheduled to report results in the afternoon.
Analysts surveyed by Briefing.com expect overall auto sales for December to drop to 3.7 million, from 3.8 million the previous month. Truck sales are expected to drop to 5.3 million from 5.5 million.
In the afternoon, the Federal Reserve will release minutes from its December meeting of the Federal Open Market Committee -- during which the governing body held interest rates at near 0%.
Fed watchers expect the minutes to reveal most of the central bank's officials support the Treasury purchases as a way to hold down long-term rates and stimulate the still shaky economy.
Reports on jobless claims, job cuts and manufacturing are on tap later in the week, and the government's closely-watched jobs report is due Friday.
Economists expect the monthly report to show employers boosted payrolls by 135,000 last month, after adding 39,000 jobs in November.
Federal Reserve Chairman Ben Bernanke is also scheduled to testify before the Senate budget panel on Friday.
The price on the benchmark 10-year U.S. Treasury slid, raising the yield to 3.35% from Monday’s 3.34%. Treasury prices and yields move in opposite directions.
Oil for February delivery eased off $2.34 to $89.21 U.S. a barrel
Gold futures for February delivery pulled back from the previous session's highs, slipping $44.10 to settle at $1,378.80 U.S. an ounce.
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