Stock markets were well into the red Thursday afternoon as investors took some profits while taking in some better-than-expected earnings reports and another suggestion of moderating job losses.
The TSX composite index tumbled 172.04 points to 9,971.39, a selloff that followed a 263-point surge Wednesday that sent the TSX main index above 10,000 for the first time in six months, leaving the market up about 34% from the start of the spring rally in early March.
In Canada, Bell Canada parent company BCE Inc. said an uptick in wireless postpaid activations and home Internet customers helped it to a quarterly profit of $377 million, up 46% from a year ago.
BCE also announced it is buying the half-interest it does not already own in Virgin Mobile Canada but its shares headed $1.09 lower to $24.98
Shares at rival Telus Corp. moved up 60 cents to $31.22 after the company reported net income in the first quarter was $322 million, up 10% from a year earlier. Its shares gained 49 cents in New York to $25.53 U.S.
The TSX financial sector dropped, with Royal Bank down $1.11 to $43.89.
Shares in Sun Life Financial Inc. were $1.96 lower to $28.00 after the insurer handed in a quarterly loss of $213 million due largely to the poor market conditions that prevailed throughout much of the quarter. The showing reversed year-earlier profit of $533 million.
Manulife Financial Corp. handed in a net loss of $1.068 billion for the first quarter, compared to net income of $869 million a year earlier. Manulife said the results reflected "the impact of the global economy on equity markets, other asset values and sales,in the first quarter of 2008."
Its shares dipped 56 cents to $22.18.
Great-West Lifeco Inc. shares fell $1.44 to $21.45 after it said the amount of money received from insurance policy premiums, segregated fund deposits and mutual fund sales plunged in the first quarter, resulting in a 15% decline in fees and other income compared with last year.
Net income attributable to common shareholders fell to $326 million, down 34% from $493 million.
The energy sector gave up early gains, although EnCana Corp. gained 12 cents to $61.32.
Shares in Opti Canada, which owns 35% of the Long Lake oilsands project, a joint venture with Nexen Inc. jumped another 31 cents or 11% to $3.10 after running up 24.5% Wednesday. Higher oil prices make oilsands development more attractive - and make companies like Opti a more attractive takeover target.
Yellow Pages Income Fund says it will cut its annual cash distribution to 80 cents a unit from $1.17 as the Montreal company reported higher first-quarter net profits despite the recession.
Its units fell two cents to $6.00.
The Canadian dollar shed 0.47 cents, to 85.30 cents U.S.
ON BAYSTREET
All but two of the 13 TSX subgroups lost ground on the day. Financials weighed down the losers, off 3%, followed by metals and mining, down 2.1%, and information technology, trailing Wednesday’s close 2%.
The only two winners were real-estate stocks, up 1.7% and health-care issues, ahead 1.1%.
The TSX Venture Exchange tacked on 5.25 points to 1,053.11 while the Nasdaq Canada Index subtracted 29.29 points to 700.90
ON WALLSTREET
The Dow Jones Industrials average slid 102.43 points to close at 8,409.85
The S&P 500 index stumbled 12.14 points to 907.39, while the Nasdaq Composite Index fell 42.86 points to 1,716.24
New York stocks turned lower Thursday as investors mulled April retail sales, a drop in weekly jobless claims and geared up for the results of the government's stress tests of the nation's big banks.
The U.S. government was due to release the results of the tests of the nation's banks around 5 p.m. ET. Regulators have been testing to see that the 19 biggest banks have enough money on hand to withstand a potential bigger downturn in the economy.
At least half the banks will reportedly have to raise more money. Reports Wednesday said Bank of America may need to raise an extra $34 billion U.S. and that Wells Fargo may need around $15 billion U.S. JPMorgan Chase and American Express are among the banks that reportedly won't need any additional capital.
Treasury Secretary Tim Geithner said late Wednesday in a TV interview that none of the 19 banks are in danger of going under.
No. 1 retailer Wal-Mart Stores posted better-than-expected sales in April, but the overall retail picture remained mixed as consumer spending was tepid in a recessionary period.
Wal-Mart said same-store sales rose 5% in April, versus forecasts for a rise of 2.8%. Same-store sales is a retail metric referring to sales at stores open a year or more.
Children's Place reported a 5% rise versus forecasts for no change. Shares rose 11%.
Teen clothing retailer Hot Topic reported sales rose 3.1% versus a forecast for a rise of 7%. Shares plunged 20%.
General Motors struggling to stay afloat, said it lost $6 billion in the first quarter or $9.66 U.S. per share. However, analysts were expecting an even bigger loss.
Late Wednesday, Cisco Systems reported quarterly sales and earnings that fell from a year ago but still topped estimates. The company also said it sees signs of a turnaround.
AIG shares rallied ahead of its quarterly results, due out after the close.
Dow telecoms AT&T and Verizon Communications both slipped after JPMorgan Chase downgraded them.
Chipmakers led the tech decliners, with Intel, Advanced Micro Devices and Broadcom all slumping.
Another government report showed first-quarter productivity rose 0.8% after falling 0.6% in the previous month. Economists thought it would rise 0.6%. Unit labor costs rose 3.3% in the first quarter after rising 5.7% in the previous quarter. Economists thought costs would rise 2.7%.
Hopes that job losses are coming down were reinforced Thursday after the Labor Department said that new applications for jobless benefits plunged last week to 601,000, the lowest level in 14 weeks and a possible sign that the massive wave of layoffs has peaked.
That was far better than the rise to 635,000 claims that economists expected but, the number of unemployed workers getting benefits climbed to a new record.
Consumer credit plunged $11.1 billion U.S. in March after rising $8.1 billion in the previous month. Economists expected it to fall $4 billion.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.23% from 3.14% Wednesday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for June delivery rose 36 cents to settle at $56.71 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $4.50 to settle at $915.50 U.S. an ounce.
