A strong rally on the Toronto stock market stalled Thursday -- going negative by the end -- despite a move by China to boost its flagging economy.
The S&P/TSX Composite Index slid 41.28 points to end the day’s trading at 11,592.12
The Canadian dollar dipped 0.05 of a cent to 97.29 cents U.S.
The gold sector lost ground as Barrick Gold Corp. fell $1.73, or 4.2%, to $39.80 and Goldcorp Inc. faded $1.02, or 2.5%, to $40.28.
Outside of the gold sector, the energy sector ducked back slightly late in the day as Cenovus Energy rose 47 cents to $32.94 while Canadian Natural Resources fell 62 cents, or 2.1%, to $28.79.
The base metals group ran ahead while the July copper contract lost early gains and was unchanged at $3.38 U.S. a pound after running up nine cents Wednesday. Teck Resources moved ahead 17 cents to $32.48.
Railroad stocks rose alongside miners with Canadian National Railways up 79 cents, or 1%, to $83.98.
The financials sector improved while Bank of Montreal upped three cents to $55.01
Retailer Lululemon was a major decliner as the company’s outlook for the year fell short of expectations. Lululemon’s stock fell $6.49, or 9% to $65.57.
In other corporate news, shares in telecom technology company Sandvine Corp. tumbled 17 cents, or 12%, to $1.25 as the company warned that second-quarter revenue was well short of expectations. It now expects between $18 million and $18.5 million of revenue for the quarter, about $4 million below a consensus estimate compiled by Thomson Reuters before the announcement.
Sandvine chief executive Dave Caputo says the revenue shortfall is the result of a delay in negotiating a deal with a major customer.
Agrium Inc. shares were up 92 cents, or 1.1%, to $81.35 after it said its dividend is going to more than double to 50 cents a share, reflecting its confidence in the future outlook. The Calgary-based company sells fertilizer wholesale globally and operates a North American retail operation
ON BAYSTREET
The TSX Venture Exchange gave back 6.56 points to 1,296.08. The Nasdaq Canada index tacked on 1.33 points to 369.41
Eight of the 14 Toronto subgroups ended positive, as financials tracked 0.7% higher, consumer discretionary stocks climbed 0.5% and consumer staples gained 0.4%.
The half-dozen laggards were weighed mostly by gold, down 3.6%, materials, fading 2.5%, and energy, off 0.6%..
ON WALLSTREET
U.S. stocks rose Thursday on a surprise rate cut by China's central bank, but comments from Ben Bernanke tempered hopes for immediate stimulus by the Federal Reserve.
The Dow Jones Industrials strengthened 46.17 points – well off its highs for the day -- to finish at 12,461
The S&P 500 was 1.55 points lower to 1,313.58. The tech-rich Nasdaq Composite Index was down 13.70 points to 2,831.02
Yoga clothing retailer Lululemon Athletic plunged after releasing a weak outlook along with its first-quarter results.
Best Buy shares sank after the retailer's founder and largest shareholder, Richard Schulze, announced plans to resign as chairman and a director.
Food producer J.P. Smucker reported that operating earnings per share rose 10 cents to $1.10 U.S., better than the drop of one cent per share forecast by analysts.
Nasdaq OX Group, which operates the Nasdaq stock exchange, announced its plans to spend $40 million U.S. to compensate trading firms for losses caused by glitches that delayed Facebook's debut. On Wednesday, Nasdaq CEO Bob Reified apologized for the problems but said affected investors should talk to their brokers.
Korean electronics-maker Samsung named a new chief executive Thursday. The Wall Street Journal reported that the company also intends to launch its new smartphone as planned, despite Apple seeking an injunction against its sales as part of a patent infringement lawsuit.
Shares of Apple edged higher, while Samsung shares closed up 5% in trading in South Korea.
Stocks opened sharply higher after China's central bank cut its range of lending and deposit rates by a quarter percentage point in an effort to address the slowdown in the nation's manufacturing sector. Its key one-year lending rate fell to 6.31%.
While there had been growing hopes for action by the Chinese government to stimulate the economy, the timing of Thursday's announcement was a surprise.
But the indexes pulled back after Fed chairman Ben Bernanke told Congress that the central bank stands ready to act, but gave no indication that additional easing is imminent.
Bernanke's testimony came after other Fed officials, including Vice Chair Janet Yellen and San Francisco Fed president John Williams, indicated that more stimuli by the central bank might be necessary to boost the sputtering U.S. economy.
Investors have been hopeful that the Fed will extend Operation Twist -- its program of swapping short-term bonds for ones with longer duration to help keep 10-year and 30-year bond yields low -- or launch a third round of asset purchases known as quantitative easing.
Meanwhile, the Spanish government held a bond auction that was an important test of its ability to raise money from investors, two days after its treasury minister warned the country was at risk of being shut out of financial markets.
Demand was more than three times the €611 million worth of 10-year bonds that Spain offered, up from a bid-to-offer ratio of 2.42 in April. But the interest rate Spain had to pay to sell the debt rose to 6.044% from 5.743% in April.
The yield for Spain's 10-year debt edged slightly lower to 6.16% in trading following the auction.
Spanish bond yields have been rising recently as investors demand an increasingly high risk premium to lend money to the government. Fears are growing that the country will need to be bailed out if it can't come up with a way to re-capitalize its banking sector, which some estimates put at a cost of up to €100 billion.
Economically speaking, first-time claims for unemployment insurance totaled 377,000 in the week ended June 2, the U.S. Labor Department said. That's 2,000 more than the consensus forecast, but was down 12,000 from the prior week.
Meanwhile, the net worth of households rose a collective $2.8 trillion U.S. in the first three months of 2012, according to data from the Federal Reserve.
The price on the benchmark 10-year U.S. Treasury rose before noon ET, lowering yields to Wednesday’s 1.65%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil stepped back 85 cents to $84.17 U.S.
Gold futures for August delivery fell $40 to $1,594.20 U.S. an ounce.
