The Toronto stock market was lower Wednesday as the U.S. Federal Reserve said it doesn't plan on cutting back on a key stimulus program right now.
The S&P/TSX Composite Index faded 99.17 points, to end Wednesday at 12,268.29, as the Fed said after its two-day meeting on interest rates that it will continue buying Treasury bills and mortgage backed securities to the tune of $85 billion U.S. a month.
The Canadian dollar skidded 0.52 cents to 97.38 cents U.S.
The utilities sector declined. Interest-sensitive securities such as utilities, REITs and telecoms have registered steep declines as speculation over Fed easing has hiked bond yields.
TransAlta lost 23 cents to $13.39 and Fortis Inc. slid 65 cents to $32.58.
The telecom sector was off with Telus Corp. down $1.09 to $34.35.
Commodity prices were mixed with the July copper one cent lower at $3.14 U.S. a pound, sending the base metals group down. Teck Resources
dropped 93 cents to $23.10 while HudBay Minerals fell 15 cents to $7.59.
The tech component fell with BlackBerry down 55 cents to $14.58. The stock had risen about 3% Tuesday after RBC Dominion Securities boosted its outlook for the company, predicting a profit this fiscal year instead of a loss thanks to stronger-than-expected shipments of its new BlackBerry 10 devices.
But the stock slid Wednesday, after Bernstein Research lowered its rating to underperform from market perform.
The gold sector was down while Barrick Gold Corp. faded 69 cents to $18.55
The energy sector dipped as Statoil says it is evaluating a new discovery of high-quality oil about 500 kilometres northeast of St. John's, N.L. The Harpoon discovery is about 10 kilometres from the Mizzen discovery, which is estimated to hold between 100 million and 200 million barrels of oil.
Statoil has a 65% interest in the Harpoon discovery and the remaining 35% is owned by Calgary-based Husky Energy. Husky shares were ahead 17 cents to $28.50
The consumer staples sector was slightly higher though convenience store chain Alimentation Couche-Tard dumped 20 cents to $62.08. The stock had soared more than 8% over the past week on speculation the company could buy the retail operations of oil and gas giant Hess, which owns about 1,350 gasoline stations in 16 East Coast American states.
Couche-Tard recently said it has the capacity to spend $1.5 billion on acquisitions. Hess announced in May that it will exit its retail, energy marketing and energy trading businesses following pressure from its third-largest shareholder -- activist investor Elliott Management -- to break up the firm.
Elsewhere on the corporate front, Valeant Pharmaceuticals International, Inc. has priced its previously announced public offering of shares aimed at helping finance the $8.7-billion U.S. acquisition of eye care company Bausch + Lomb.
Valeant will issue slightly more than 23.5 million common shares at a price of $85 per share, for aggregate gross proceeds of some $2 billion. Valeant shares rose 90 cents to $88.64.
On the economic front, Statistics Canada reported this morning that wholesale trade came in for April at $49.0 billion, up 0.2% from the previous month, mainly as a result of higher sales in the computer and communications equipment and supplies industry
ON BAYSTREET
The TSX Venture Exchange lost 5.74 points to 924.25
All but three of the 14 Toronto subgroups were down on the day, weighed by gold issues, down 2.5%, utilities, surrendering 2.3%, and the metals and mining group, off 1.9%.
The two gainers were health-care, better by 0.6%, and consumer staples, up 0.2%. Industrial stocks were flat by the closing bell.
ON WALLSTREET
U.S. Federal Reserve chairman Ben Bernanke tried to explain… carefully… how the central bank will figure out when it's the right time to pull back on its monthly bond purchases, but investors weren't having any of it Wednesday
The Dow Jones Industrials took a header, losing 206.04 points, or 1.4%, to 15,112.20
The S&P 500 index doffed 22.88 points to 1,628.93. The tech-rich NASDAQ Composite dumped 38.98 points to 3,443.20
Stocks were in the red all day, but were barely below the breakeven line before the Fed chairman began speaking.
The Federal Reserve left interest rates unchanged and said it would continue with its current bond purchase program -- $85 billion U.S. in mortgage-backed securities and Treasuries each month - -for the foreseeable future. But during his press conference, Bernanke tried to highlight the scenarios in which the Fed would consider tapering.
If the economy continues to improve, Bernanke said it would be "appropriate to moderate the monthly pace of purchases later this year," and end the program by mid-2014. At that point, the Fed expects the unemployment rate would be around 7%.
But he stressed that scenario would only play out if the economic recovery continues as the Fed expects it to. If it doesn't, the Fed would adjust its policies.
In corporate news, Tesla Motors announced a recall of some of its Model S cars for a non-mechanical defect.
FedEx shares edged up after the shipping giant reported quarterly earnings the blew past forecasts, though revenue was roughly in line with estimates. The company is often seen as a bellwether for the global economy given the nature of its delivery business and its international footprint.
Adobe shares jumped after the software company reported quarterly earnings that beat expectations.
Dish Networks dropped its pursuit of Sprint, clearing the way for Japan's SoftBank to continue with its offer. Dish said it would instead focus on its tender offer for Clearwire
Shares of Men's Wearhouse slid after the clothing retailer "terminated" executive chairman George Zimmer.
Prices for the 10-year U.S. Treasury stumbled, spiking yields to 2.31% from Tuesday’s 2.18%. Treasury prices and yields move in opposite directions.
Oil prices dropped 45 cents to $97.99 U.S. a barrel.
Gold prices fell $12.40 to $1,354.50 U.S. an ounce
