Canadian stocks fell Thursday, tracking their U.S. counterparts, as banks dropped further and gold miners pared gains after Federal Reserve Chairman Ben Bernanke downplayed inflation fears and didn’t outline a case for further policy easing.
The S&P/TSX Composite Index ended the day down 36.60 points to 12,683.96
The Canadian dollar backtracked 0.53 of a cent to 101.19 cents U.S.
Financial stocks were weak, with shares of Royal Bank of Canada lost 0.3% to $48.92, Bank of Nova Scotia shed 0.8% to $52.81 and Toronto-Dominion Bank fell 1.7% to $76.33.
Also contributing to the weak tone in markets, shares of Transat A.T. Inc. fell 9.3% to $7.25, after the tour and charter airline operator swung to a third-quarter loss amid high crude-oil prices.
Gold miners were among the gainers as prices of the precious metal rebounded from the previous day’s losses, but came off their highs on Bernanke’s reference to inflation. Gold prices usually rise with expectations for higher inflation.
The S&P/TSX Global Gold Index was up buoyed by an increase of more than 2% for gold price futures.
Barrick Gold Corp. gained 1.5% to $54.50, well off the day’s high, and Goldcorp Inc. added 1.6% to $55.30
On the economic front, Statistics Canada reported its New Housing Price Index inched up 0.1% in July, following a 0.3% advance in June, powered mostly by gains in the Toronto and Oshawa markets.
The agency also said our merchandise exports rose 2.2% and imports edged up 0.5% in July. As a result, Canada's trade deficit with the world narrowed from $1.4 billion in June to $753 million in July.
ON BAYSTREET
The TSX Venture Exchange gained 14.83 points to 1,804.14, while the Nasdaq Canada index fell back 5.32 points to 534.01
Of the 14 Toronto subgroups, 10 were in negative territory at the close. Global base metals were off 2.3%, metals and mining stocks drooped 2.2%, and information technology issues were 1.6% to the bad.
The four gainers were led by gold, up 2.1%, materials, progressing 0.9%, and utilities, edging up 0.2%.
ON WALLSTREET
In New York, stocks fell Thursday after Ben Bernanke made a speech that failed to knock investors' socks off.
The Dow Jones Industrials hurtled earthward 119.05 points, or 1%, to close at 11,295.80
The S&P 500 docked 12.72 points to 1,185.90, while the Nasdaq gave back 19.80 to 2,529.14.
Shares of Bank of America and JPMorgan were among the weakest performers on the Dow. But strength in the technology and consumer staples sector helped support the index. Cisco, Microsoft, Kraft and Procter & Gamble were all higher.
The Men's Warehouse reported a 34% jump in second-quarter earnings compared with last year. Despite the strong performance, shares of the clothier fell 7%.
AOL will be in the spotlight as the AOL-TechCrunch fiasco continues. Inside sources say TechCrunch's founder Michael Arrington will be fired, in the aftermath of his launching a new venture capital fund -- CrunchFund.
Shares of Google edged higher after the search giant announced it bought Zagat, the consumer reviews and survey company, for an undisclosed sum.
The news sent shares of online reservation site OpenTable down a whopping 10%.
The Federal Reserve chairman reiterated previous statements that the central bank stands ready to use certain "tools" to help stimulate the economy. But he offered no indication as to which of those tools the Fed is or is not prepared to use.
Speaking in Minnesota, Bernanke repeated his argument that lawmakers should not put the economic recovery at risk in the debate over reducing the nation's budget deficit.
Some investors had anticipated that Bernanke would drop some sort of subtle hint on which direction the Fed is leaning. The central bank's Federal Open Market Committee will meet later this month to discuss the economic outlook and policy measures.
It's been a rocky road for investors -- stocks have been quick to react to a series of mixed economic reports, creating a volatile environment. That's resulted in a roller coaster ride that doesn't seem to be ending anytime soon.
Europe is a continued point of concern for investors who are also focusing on the U.S. economy and jobs. Just last week, the government released a dismal jobs report that showed zero growth, bolstering concern for the overall economy.
Stocks are coming off of sharp gains Wednesday, following a three-day rout.
After the market closes, President Obama will wrap up the busy day with a speech on job creation at 7 p.m. ET. He is expected to propose roughly $300 billion U.S. in stimulus measures to get job creation back on track.
On the European front, the Bank of England voted to leave interest rates unchanged at 0.5%.
Economically speaking, filings for first-time unemployment benefits rose 2,000 to 414,000 in the week ending Sept. 2, the U.S. Labor Department reported Thursday. That was up from the 409,000 claims filed the week before, and worse than the 400,000 claims economists surveyed by Briefing.com had expected.
The U.S. trade gap narrowed to $44.8 billion U.S. in July, led by a surge in exports. Trade balance figures were expected to show the deficit widened to $51.5 billion U.S. in July from $53.1 billion U.S. in June.
The price on the benchmark 10-year U.S. Treasury gained ground, thus dropping the yield to 1.99% from Wednesday’s 2.04%. Prices and yields move in opposite directions.
Oil for October delivery reversed 42 cents to $88.92 U.S. a barrel.
Gold futures for December delivery rose $44.60 to $1,862.20 U.S. an ounce.
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