The Toronto stock market moved lower Friday as traders looked ahead to next week's U.S. Federal Reserve meeting and hope the central bank will provide clues as to whether it plans to ease off on some of its economic stimulus.
The S&P/TSX Composite Index dropped 60.46 points, to greet noon at 12,216.67
The Canadian dollar docked 0.22 cents to 98.25 cents U.S., amid a disappointing update on Canadian manufacturing.
Financials declined with TD Bank down 50 cents to $81.74.
Telecoms were also down and BCE Inc. gave back 41 cents to $44.22.
Speculation about cutting back on the QE program has had the effect of pushing U.S. Treasury yields sharply higher, which in turn has had a negative effect on TSX defensive/interest-rate sensitive sectors such as REITS, utilities, telecom and pipeline stocks.
The industrials sector moved down while Canadian Pacific Railway fell $1.04 to $125.53.
The base metals sector was lower as July copper was up a cent to $3.20 U.S. a pound. First Quantum Minerals gave back 17 cents to $17.30.
Among gold plays, Iamgold added three cents to $5.38.
On the economic slate, Statistics Canada reported manufacturing sales fell 2.4% in April to $48.2 billion — the fourth decline in five months and the largest monthly percentage drop since August 2009.
ON BAYSTREET
The TSX Venture Exchange added 2.69 points to 932.75
All but two of the 14 Toronto subgroups were lower, weighed by materials, down 1%, while gold and the metals and mining group slid 0.9% each.
The two gainers were in real-estate, up 0.4%, and utilities, up 0.2%.
ON WALLSTREET
U.S. stocks drifted lower Friday as a week of volatile trading draws to a close.
The Dow Jones Industrials dropped 81.72 points to 15,094.40
The S&P 500 index shed 6.51 points to 1,629.85. The tech-rich NASDAQ Composite moved lower 15.03 points to 3,430.34
In corporate news, Smithfield Foods said earnings fell 69% to $29.7 million U.S, or 21 cents per share, in the quarter ended April 28.
The meat producer blamed high grain prices due to last year's drought, which pushed up the cost of hog production. Smithfield announced last month that it was being bought by Chinese meat producer Shuanghui International.
Shares of Restoration Hardware jumped after the retailer reported results that easily beat forecasts. Shares of the company have been red hot since the retailer went public in November.
Smith & Wesson shares rose after the gun maker released preliminary results showing record quarterly and full-year sales and earnings.
Analysts at Credit Suisse upgraded SolarCity, sending shares of the Elon Musk-backed alternative energy company higher.
The choppy trading comes as investors readjust their expectations for the U.S. Federal Reserve, which could begin to slow the pace of its bond buying program later this year. Fed Chairman Ben Bernanke has said repeatedly that any decision to curtail monetary stimulus will depend on how the economy performs.
The Fed has a policy meeting next week and Bernanke will speak at a press conference Wednesday.
Economically speaking, the U.S. Bureau of Labor Statistics said producer prices increased 0.5% in May, driven largely by food and energy prices. The measure of prices for unfinished goods, excluding food and energy, fell 0.4%.
The University of Michigan and Thomson Reuters said the initial reading of the June consumer sentiment index fell to 82.7 from 84.5 in May, when the index hit its highest level in nearly six years.
Prices for the 10-year U.S. Treasury gained, lowering yields to 2.11% from Thursday’s 2.17%. Treasury prices and yields move in opposite directions.
Oil prices jumped 98 cents to $97.67 U.S. a barrel.
Gold prices strengthened $11.10 to $1,388.90 U.S. an ounce
