The Toronto stock market was lower Friday as traders looked ahead to next week's U.S. Federal Reserve meeting and hope that 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 89.77 points, to end the day and week at 12,187.36
The Canadian dollar docked 0.14 cents to 98.32 cents U.S., amid a disappointing update on Canadian manufacturing.
The base metals sector declined, as July copper was up two cents to $3.21 U.S. a pound. First Quantum Minerals gave back 56 cents to $16.91.
Techs were also weak with CGI Group down 71 cents to $30.05.
Among gold plays, Goldcorp Inc. faded 71 cents to $28.21.
Financials gave up some of their strength with TD Bank down 92 cents to $81.32.
The energy sector was off as Suncor Energy was down 36 cents to $30.96.
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 interest-rate sensitive sectors such as real estate, utilities, telecom and pipelines.
But Canada's telecom sector has also been pressured after Ottawa quashed the idea that big telecoms could take over the spectrum of smaller players. Federal Industry Minister Christian Paradis said current rules would stand, leading to Telus to abandon its plan to buy Mobilicity. Telus shares were unchanged at $34.72.
BCE Inc. gave back 47 cents to $44.16 while Rogers Communications dropped 54 cents to $45.35.
Utilities were ahead following a string of losses. 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.
Fortis Inc. gained 70 cents to $33.00. On Thursday, New York regulators cleared the way for Fortis Inc. to buy CH Energy Group, the parent of Central Hudson Gas and Electric Corp. in a deal valued at $1.5 billion U.S.
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 3.51 points to 932.75
All but two of the 14 Toronto subgroups were lower, weighed by metals and mining, down 2.4%, while global base metals and materials each slid 1.6%.
The two gainers were in utilities, up 0.6%, and real-estate, up 0.01%.
ON WALLSTREET
U.S. stocks fell Friday as investors continue to weigh the odds of a shift in Federal Reserve policy following a batch of mixed economic reports.
The Dow Jones Industrials dropped 105.90 points to 15,070.20
The S&P 500 index shed 9.84 points to 1,626.52. The tech-rich NASDAQ Composite docked 21.01 points to 3,423.55. All three indexes were on track to end lower for the week.
In corporate news, Smithfield Foods said earnings fell 69% to $29.7 million, 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 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.
The International Monetary Fund said it expects U.S. economic growth to slow this year due largely to budget cuts in Washington. The IMF anticipates the Fed will continue buying assets until the end of the year.
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 $1.03 to $97.72 U.S. a barrel.
Gold prices strengthened $10.30 to $1,388.10 U.S. an ounce
