Canadian stocks endured a fourth straight finish in the red Wednesday. Resource stocks are struggling on the day, contributing to the weakness.
The S&P/TSX Composite Index lost 240.14 points or 2.3 % to finish the day at 10,067.26, its lowest finish in more than three weeks.
Mining stocks were down adding to recent weakness. Teck Cominco dropped 5% to $17.35, Inmet was down 2.4% to $38.26 and First Quantum faded 4.6% to $50.75.
Materials stocks are down as Potash Corp. plunged 10.9% to $107.85 after Europe's biggest producer of the fertilizer reportedly gave a bleak outlook for demand.
Agrium fell 7% to $48.60 after the company said the independent proxy voting and corporate governance advisory firm RiskMetrics Group, has recommended stockholders of CF Industries Holdings, to tender their shares into Agrium's exchange offer of $40.00 in cash plus one Agrium share per CF share.
Energy stocks were down although crude oil moved modestly higher amid very choppy trading. Suncor stumbled 5.1% to $34.35, Canadian Natural Resources dropped 3.5% to $59.12 and Encana was down 3% to $57.20
In corporate news, TransCanada Corp. was down 5.2% at $31.35 after the stock was reiterated by Credit Suisse at a Neutral rating, while its price target was lowered to $35 from $38. The brokerage reduced its 2009 EPS estimate to $2.05 from $2.19, and its 2010 estimate to $2.23 from $2.41.
The company said it agreed to acquire ConocoPhillips's stake in the Keystone Pipeline System for approximately $550 million U.S. plus the assumption of approximately $200 million U.S. of short-term debt.
Research in Motion slid 3.9% to $87.37 as traders await the Blackberry-maker's quarter earnings report tomorrow. In a speech Wednesday, co-CEO Jim Balsillie said the company has more than one million government customers.
AutoCanada Income Fund jettisoned 2.2% to $1.76 after the company said that it has signed agreements with GMAC and Chrysler Financial Canada whereby GMAC shall provide AutoCanada with wholesale floor plan funding for each of its owned dealerships.
In economic news, Canadian wholesale sales in current dollars fell for a seventh straight month in April, declining 0.6% to $40.3 billion, according to data released Wednesday by Statistics Canada. Economists expected wholesale sales to drop 0.7% in April.
Canada's leading indicator dropped 0.1% in May, marking its ninth consecutive monthly decline. However, the rate of the decline slowed considerably due to a comeback in the stock market.
The Canadian dollar raised itself 0.25 cents to 88.45 cents U.S.
ON BAYSTREET
All but one of 13 TSX subgroups were in negative country. Metals and mining stocks lost 4.8%, materials stocks were off 3.7%, while energy trailed yesterday’s close by 3.2%.
The one gainer was consumer staples, up 0.2%.
The TSX Venture Exchange subtracted 23.82 points to 1,115.37 while the Nasdaq Canada Index collapsed 25.64 points to 742.12.
ON WALLSTREET
In New York, the Nasdaq composite index gained Wednesday, thanks to a tech rally, but the broader market meandered, with financials sliding after Standard & Poor's cut its outlook on 22 banks.
The Dow Jones Industrials average was off 7.49 points to end the day at 8,497.18. The S&P 500 index slid 1.26 points to 910.71. The Nasdaq was up 11.88 points to 1,808.06.
Stocks zigzagged through the session as investors considered the corporate news, President Obama's plan for an overhaul of financial market regulation and a tame reading on consumer inflation.
Stocks fell the first two days of the week on worries that the recession could drag on longer than has been anticipated.
Tech gainers included Dow components Cisco Systems, Intel and Microsoft as well as non-Dow stocks Qualcomm, Broadcom and Texas Instruments
The Dow's biggest gainers included Home Depot, Wal-Mart Stores, 3M, McDonald's and Johnson & Johnson.
But the gains were tempered by a retreat in financial shares after Standard & Poor's downgraded the credit ratings of 22 banks, including Wells Fargo, Fifth Third and KeyCorp.
S&P said operating conditions for the industry will get worse as financial markets become more volatile and regulatory supervision gets tighter.
FedEx reported a wider fourth-quarter loss that missed sales expectations but beat them on a per-share-basis. The delivery firm, often seen as a proxy for the economy, forecast earnings of 30 to 45 cents U.S. per share in the current quarter, versus Wall Street's forecasts for a profit of 68 cents U.S. per share.
FedEx's management gave a mixed outlook. The CEO said there are signs that the worst of the recession is over and the chief financial officer said the operating environment in the first two quarters in fiscal 2010 is going to be extremely difficult.
FedEx shares were modestly lower, erasing bigger losses.
President Obama unveiled details Wednesday afternoon on how he plans to reorganize the way banks and other firms are regulated in the wake of the worst financial crisis since the Great Depression.
The plan includes giving increased power to the Federal Reserve to monitor the financial system and also increased Treasurys responsibilities. Obama also proposed creating a consumer watchdog agency to track mortgage and credit card practices.
The government's release of the Consumer Price Index shows lower-than-expected inflation at the consumer level.
The CPI rose 0.1% in May, lower than the 0.3% increase expected by a consensus of economists from Briefing.com. CPI was flat in April.
The core CPI, which excludes volatile food and energy prices, edged up 0.1% in May, matching consensus expectations from Briefing.com consensus. In the prior month, it rose 0.3%.
For the year, consumer prices plunged 1.3%, the biggest annual drop since 1950.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.60%. Treasury prices and yields move in opposite directions.
U.S. light crude oil for July delivery rose 56 cents to settle at $71.03 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery gained $3.80 to settle at $936 U.S. an ounce.
