The Toronto stock market lost early momentum mid-morning Tuesday after U.S. Federal Reserve Chairman Ben Bernanke failed to reassure traders that more stimuli are on the way to support a weakening economy.
The S&P/TSX Composite Index docked 7.55 points, to reach noon ET at 11,513.63, as traders also took in a signal that the Bank of Canada is still leaning towards raising interest rates eventually, although it said the economic outlook is slightly weaker than in its previous forecast.
The Canadian dollar gained 0.02 cents to 98.54 cents U.S., after the Bank of Canada said it was keeping its key rate unchanged at 1%, reflecting a general slowing in global economic conditions. The bank also maintained language in its accompanying statement which signaled an eventual tightening bias, indicating that rates would rise at some point.
Quebec aerospace manufacturer Heroux-Devtek Inc. is selling about one-third of its business for $300 million in cash. The deal affects Heroux-Devtek locations in Dorval near Montreal, Mexico, Texas and Ohio. Its stock soared $3.14 to 40% to $10.99.
The base metals sector was down as copper gave up early gains to decline three cents to $3.45 U.S. a pound. Lundin Mining was down 13 cents to $3.94.
First Quantum Minerals Ltd. lost 26 cents to $16.71 as the miner said it is temporarily suspending operations at its Guelb Moghrein copper-gold mine in Mauritania due to strike action by some of its workers. The company says it is in the midst of a government-facilitated mediation process to resolve the strike.
The gold sector was down as Barrick Gold fell 56 cents to $34.83.
The TSX energy sector lost much of its early strength as Canadian Natural Resources gained 15 cents to $26.63.
The information technology sector was ahead with CGI Group up 62 cents to $23.80 but Research In Motion Ltd. slipped 10 cents to $6.99.
Industrials were supportive as Canadian National Railways rose 66 cents to $87.31.
Financials also provided lift with Royal Bank ahead 39 cents to $52.57.
In economic matters, Statistics Canada revealed this morning that Manufacturing sales unexpectedly fell 0.4% in May following a downwardly revised 1.1% drop in April and a 2.0% jump in March. Market expectations were for a 0.6% increase in May.
The nation’s number-crunchers added that the decline in overall sales was limited by a sizable 65.8% surge in the aerospace sector that offset a sizeable portion of a 9.6% drop in the petroleum and coal component.
ON BAYSTREET
The TSX Venture Exchange doffed 7.61 points to 1,175.74. The Nasdaq Canada index shed 2.32 points to 339.67.
In all, eight of the 14 Toronto subgroups were lower at the lunch break. Gold sank 1.6%, metals and mining were lower by 1.5% and global base metals trailed yesterday’s close by 1%.
The half-dozen gainers were buoyed by industrials, up 0.4%, while energy and consumer staples each improved 0.3%.
ON WALLSTREET
U.S. stocks turned lower from their highs of the day, after U.S. Federal Reserve Chairman Ben Bernanke said Europe's debt problems and the fiscal cliff are hindering U.S. growth.
Bernanke told a Senate panel that risks to economic growth have grown and that the Fed "is prepared to take further action as appropriate," according to prepared testimony. That's not exactly new rhetoric for the central bank.
The Dow Jones Industrials remained positive 50.56 points at the midpoint of the day to 12,777.77
The S&P 500 added 4.85 points to 1,358.49. The Nasdaq Composite Index was up 7.46 points to 2,904.40.
Goldman Sachs beat expectations and reported earnings per share of $1.78 U.S. on $6.63 billion U.S. in revenue.
Coca-Cola reported earnings per share of $1.21 U.S. on revenue of $13 billion. Both figures were better than analysts' forecasts.
Shares of Johnson & Johnson slid after the company reported earnings per share of $1.30 U.S. and lower-than-expected revenue of $16.5 billion U.S.
Facebook's stock continued to slide Tuesday, a day after shares fell 8%. After a botched public debut, the stock has struggled to move back toward its IPO price of $38 U.S. a share.
Sprint Nextel shares edged higher as the telecom company launched faster service in 15 cities across the United States. The new 4G LTE network is about 10 times faster than the commonly used 3G and is available on five of its phones.
Yahoo shares gained traction after the company named Marissa Mayer, a Google executive who was one of the first two dozen employees at the search leader, as its new CEO on Monday. Yahoo reports earnings after the closing bell.
HSBC shares fell after a U.S. Senate report released late Monday said HSBC failed to prevent billions of dollars worth of money transfers that investigators believe were linked to drug cartels and terrorist groups.
Economically speaking, U.S. consumer prices rose at a 1.7% annual rate in June, unchanged from May.
The Federal Reserve reported that June industrial production rose 0.4%, beating economist expectations of 0.3%.
The price on the benchmark 10-year U.S. Treasury sagged, pushing the yield up to 1.49% from Monday’s 1.46%. Treasury prices and yields move in opposite directions.
Oil for August delivery ducked back in price 35 cents to $88.08 U.S. a barrel.
Gold futures for August delivery fell $7.50 to $1,584.10 U.S. an ounce.
