The Toronto stock market was down early Tuesday afternoon, despite stronger commodities and optimism surrounding a two-day policy meeting for the U.S. Federal Reserve.
The S&P/TSX Composite index backpedaled 50.51 points by noon Tuesday to 11,707.37
The Canadian dollar shaved off 0.15 cents to 99.69 cents U.S.
In corporate developments, Rona Inc. shares are up 20% after the company rebuffed an unsolicited takeover from Lowe's Companies worth $1.76 billion. The Montreal-area company said the offer from its American rival wouldn't be in its shareholders' best interest, but Lowe's said. Rona shares rose $2.37 to $14.24.
In earnings, Thomson Reuters says its adjusted earnings rose to 54 cents per share, compared to 51 cents per share in the second quarter of 2011. Its diluted earnings per share were $1.11 per share up from 67 cents per share in the second quarter of 2011. Overall revenue fell by 4% to $3.3 billion from $3.4 billion U.S. Shares backed off 78 cents to $28.16.
Inmet Mining said higher copper sales volumes helped push its second quarter earnings up 74% from profits reported a year earlier. The company reported net income of $94.2 million U.S. or $1.36 per share for the quarter ended June 30, compared to $54.3 million or 83 cents per share for the same period a year earlier. Inmet shares gained 6.5% to $40.55.
A federal arbitrator has sided with Air Canada in its labour dispute with the union representing its pilots. The five-year collective agreement will be effective until April 2016. Shares were up 8%, or nine cents, to $1.17.
On the economic ledger, Statistics Canada said real gross domestic product edged up 0.1% in May, after increasing 0.3% in April.
Elsewhere, the agency’s Industrial Product Price Index slumped 0.3% in June from May, due mostly to lower prices for petroleum and coal products, while its Raw Materials Prices Index fell 4%, owing in part to a 1% slump in prices for crude oil.
ON BAYSTREET
The TSX Venture Exchange slipped 0.91 points to 1,183.45. The Nasdaq Canada index faded 2.11 points to 335.15.
Nine of the 14 Toronto subgroups were lower by noon. Health-care stocks shed 1.6%, while gold and energy stocks dipped 1.2%.
The five gainers were led by utilities, up 0.3%, metals and mining, picking up 0.2%, and industrials, nipping up 0.1%.
ON WALLSTREET
U.S. stocks were little changed Tuesday amid another day of cautious trading ahead of meetings by U.S. and European central bankers.
The Dow Jones industrial average demurred 38.41 points, to break for lunch at 13,034.60
The S&P 500 dropped 4.37 points to 1,380.93. The Nasdaq docked 3.66 points to 2,942.18.
Coach shares tumbled after the retailer reported revenue that fell short of forecasts. Of particular concern is the fact that Coach pointed to sluggishness in North America.
UBS said its second-quarter profit tumbled 58% from a year earlier due to lower trading revenue and losses from the botched Facebook IPO. The Swiss bank said it incurred a loss of 349 million Swiss francs due to problems executing electronic trades when Facebook debuted on the Nasdaq in May.
UBS said it will take legal action against Nasdaq to address its "gross mishandling of the offering and its substantial failures to perform its duties." Shares of the bank were in the red.
Deutsche Bank said its second-quarter profit dropped 44% and revenue declined 6% as Europe's sovereign debt crisis weighs on investor confidence and client activity across the bank. The bank said it is cutting 1,900 jobs, mostly outside of Germany, in an effort to save €350 million, sending the stock higher.
Oil producer BP reported a loss of $1.4 billion U.S. for the second quarter, sending shares sharply lower. The company wrote down the value of $5 billion U.S. worth of assets, including U.S. refineries and shale gas assets, and had continued costs related to the Gulf of Mexico oil spill.
Shares of Pfizer rose after the drug maker beat earnings and revenue expectations.
Investors are sifting through a handful of economic reports Tuesday, including key readings on consumer confidence, spending and income.
But they are mostly sitting back and waiting for central bank meetings in the United States and Europe this week, when they'll find out whether the U.S. Federal Reserve and the European Central Bank will take new stimulus measures to boost the economy.
The Fed's two-day meeting kicks off Tuesday but culminates in an announcement Wednesday afternoon. The E.C.B. will take centre stage Thursday with its Governing Council meeting in Frankfurt.
The most likely step the Fed will take is cutting the interest rate the Fed pays on bank reserves from its current 0.25% to zero, following the E.C.B.'s decision earlier this month to cut its deposit rate to zero, said one expert
The Fed could also extend its plan to keep interest rates near zero beyond its current 2014 forecast, he said.
Personal income rose 0.5% in June, while spending remained unchanged, according to a government report. Economists surveyed by Briefing.com expected a 0.4% increase in income and a 0.1% rise in spending.
In a sign of a U.S. housing rebound, home prices in 20 major cities rose 2.2% in May, according to the S&P/Case-Shiller index. Economists were forecasting a 1.8% drop in prices in May, following a 1.9% decline in the previous month.
The Chicago PMI, a regional reading on manufacturing activity, rose to 53.7 in July from 52.9 the prior month. Economists were expecting the index to slip to 52.5 during the month.
Consumer confidence rose in July. The Conference Board's index rose to 65.9 from 62.7 in June. Economists were expecting the reading to decline slightly to 61.
The price on the benchmark 10-year U.S. Treasury gained a bit, lowering yields to 1.48% from Monday’s 1.50%. Treasury prices and yields move in opposite directions.
Oil for September delivery surrendered $1.13 to $88.65 U.S. a barrel.
Gold futures for August delivery slipped $1 to $1,618.70 U.S. an ounce.
