Canadian stocks dropped on Tuesday, as weak commodity prices weighed on the material and energy sectors, while shares of Royal Bank of Canada fell amid allegations of illegal futures trades.
The S&P/TSX Composite Index fell 183.45 points, or 1.5%, to close a tough day at 12,323.61
The Canadian dollar was flat at 100.95 cents U.S.
Shares of Royal Bank of Canada declined 3% to $57.00. Canada’s largest bank by assets has been accused by the U.S. Commodity Futures Trading Commission in a lawsuit filed Monday of engaging in illegal stock futures trades with itself to gain Canadian tax benefits. The bank said in a statement it will "vigorously defend" its reputation.
Separately, the bank said it has reached a definitive deal to acquire full ownership of the RBC Dexia Investor Services Ltd. joint venture for about $1.1 billion U.S.
Inmet Mining Corp. shares were down 3.9% to $55.45. Shares of Ivanhoe Mines Ltd. slumped 8.3% to $14.30, after TD Securities and Bank of Montreal downgraded their ratings on the stock.
Goldcorp Inc. shares fell 5.8% to $43.11. Lake Shore Gold Corp. shares slumped 13.8% to $1.00 apiece, after the company said late Monday that an accident at its Timmins West mine in Ontario killed one of its employees.
Bucking the negative trend, shares of gold miner Pretium Resources Inc. rallied 7.7% to $15.14.
On Tuesday, the company reported a high-grade mineral resource estimate for its Brucejack project in northern British Columbia.
In the energy arena, Athabasca Oil Sands Corp. shares fell 2.7% to $10.86.
Canadian Natural Resources Ltd. shares lost 1.7% to $33.17, after the company said Allan Markin had resigned as chairman for personal reasons, and will be succeeded by vice-chairman N. Murray Edwards.
In the technology sector, shares of Research In Motion Ltd. declined 9.3% to $12.93. The BlackBerry maker launched the full version of its BlackBerry Mobile Fusion, a mobile device management software that enables enterprise customers to manage Apple’s iOS and Android devices through the BlackBerry server.
In other news, Air Canada shares fell 4.3% to 89 cents, after Moody’s Investors Service downgraded the airline’s debt rating to Caa1 from B3. The agency cited its concerns over the airline’s ability to fund new planes and sizeable pension shortfalls amid rising costs of fuel and soft economic conditions. The airline’s outlook remained stable, Moody’s said.
Shares of construction firm SNC-Lavalin Group Inc. dipped 1.7% to $40.04. The World Bank has temporarily barred the firm’s subsidiary from bidding on new World Bank projects, while it concludes an investigation into the subsidiary’s failed bid for a bridge contract in Bangladesh.
SNC-Lavalin’s interim CEO said the firm launched its own internal investigation in this matter and will continue to cooperate with the World Bank.
Shares of Molson Coors Canada Inc. dropped 5.5% to $43.01, after its parent company Molson Coors Brewing Co. said Tuesday it will buy brewer StarBev L.P. from CVC Capital Partners in a deal worth 2.65 billion euros ($3.54 billion U.S.) to expand in Central and Eastern European beer markets.
ON BAYSTREET
The TSX Venture Exchange fell 24.16 points to 1,545.63, while the Nasdaq Canada index slid 6.63 points to 411.49
All but one of the 14 Toronto subgroups lost ground Tuesday. Gold sank 3.8%, while materials faltered 3.2% and the metals and mining hurtled earthward 2.9%.
The lone stalwart was in health-care, stronger by 1%.
ON WALLSTREET
In New York, stocks sold off sharply Tuesday afternoon, after the Federal Reserve indicated it was unlikely it would offer more stimuli anytime soon.
The Dow Jones Industrials stumbled 64.94 points to close at 13,199.50, after hitting heights the big board had not seen in more than four years on Monday.
The S&P 500 tailed off 5.73 points to 1,413.31, and the Nasdaq staggered 6.13 points to 3,113.57
Financial stocks were among the biggest decliners Tuesday, with shares of Citigroup, Bank of America, Morgan Stanley, JPMorgan Chase, and Goldman Sachs all falling more than 1%.
Shares of Apple continue to hit new all-time highs, after several analysts raised their price targets on the stock. One analyst predicted that shares, which recently cleared $600 U.S., could top $1,000 U.S.
Avon Products shares were flat Tuesday, following on gains of more than 17% Monday, after the company rejected a $10-billion U.S. purchase offer from beauty company Coty Inc.
Daily deals site Groupon remains in the spotlight following a report in Tuesday's Wall Street Journal saying that the Securities and Exchange Commission is probing its revision of its first set of results as a publicly traded company.
Shares of retailer Urban Outfitters surged after the company gave upbeat guidance in a SEC filing.
After trading slightly below the breakeven line for much of the day, all three indexes tumbled following the release of the Federal Reserve's minutes from its most recent open committee meeting, which suggested that it was less likely the Fed would provide further help to the markets unless growth slows.
Much attention will be paid later this week to the all-important jobs report for March, which is due out Friday. However, U.S. stock markets will be closed in observance of Good Friday, and bond markets will close early.
On the economic slate, a report on factory orders for the month of February came in below expectations after the report said activity picked up by 1.3% compared to expectations of 1.4%.
Still, that represents an increase. January orders dropped by 1%.
Auto sales were in focus throughout the day. Chrysler Group said March was the best month for sales in four years. Ford sales rose 5% and GM sales surged 14.2% in March from year-earlier levels.
The price on the benchmark 10-year U.S. Treasury dropped sharply, propelling yields up to 2.28% from Monday’s 2.19%. Treasury prices and yields move in opposite directions.
Oil for May delivery shed $1.13 to $104.10 U.S. a barrel.
Gold futures for April delivery fell $28.60 to $1,651.10 U.S. an ounce.
