The Toronto stock market was lower Wednesday as telecom stocks dropped sharply amid a report of a potential new player in the Canadian wireless sector and pressure on gold miners as bullion prices retreated to three-year lows.
The S&P/TSX Composite Index lost 53.52 points to end Wednesday at 11,951.90
The Canadian dollar hiked 0.31 cents at 95.42 cents U.S.
The telecom sector declined sharply, after the Globe and Mail reported that Verizon Communications Inc. is looking at two of Canada's smaller wireless network operators. It has reportedly made an initial offer of $700 million for Wind Mobile and is starting talks with Mobilicity.
The potential for competition from a big American telecom punished the big Canadian telecoms, although most were off early lows.
Telus Corp. dropped $2.63, or 7.9%, to $30.74, Rogers Communications fell $4.18, or 9.1%, to $41.71, while BCE Inc. gave back $1.67, or 3.9%, to $41.65.
On the TSX, the gold sector was the leading decliner as speculation over what the U.S. Federal Reserve will do in tapering its $85 billion U.S. a month in bond purchases continued to pummel bullion prices. Barrick Gold lost $1.42, or 8.4%, to $15.49 while Iamgold tumbled 36 cents, or 8.2%, to $4.01.
Transport giant Bombardier Inc. also dragged the TSX lower after the company announced that the first flight of its new CSeries jet has been delayed by a month to the end of July. Its shares fell 10 cents to $4.57.
Other commodities were lower and the energy sector was down as Imperial Oil shed 23 cents to $39.70.
The base metals sector fell with July copper down three cents at $3.04 U.S. a pound. HudBay Minerals gave up 34 cents to $6.73.
Financials were up almost and Royal Bank climbed 81 cents to $60.96.
The consumer staples sector was also higher as grocer Loblaw Cos. rose 74 cents to $47.51.
Techs were also supportive as BlackBerry rose 31 cents to $15.63.
In other corporate developments, French authorities are investigating engineering company SNC-Lavalin over allegations that a portion of the $56 million in questionable payments identified by the company in an internal investigation was used to win a project in the United Arab Emirates.
The newspaper L'Union de Reims reported that $13.5 million that was supposed to be used for European projects appeared to have instead been paid to someone in the Middle East. Its stock was up 53 cents to $44.56.
ON BAYSTREET
The TSX Venture Exchange erased 21.52 points to 860.84
Of the 14 Toronto subgroups, eight were negative on the day. Gold slid 6%, while telecoms dipped 5.3%, and materials skidded 2.8%.
The half-dozen gainers were led by consumer staples, up 1.2%, information technology, gaining 1%, and financials, better by 0.8%.
ON WALLSTREET
U.S. stocks rose sharply Wednesday as investors bet the weak GDP reading would keep the Fed's stimulus going.
The Dow Jones Industrials added 149.83 points, or 1%, to close at 14,910.10
The S&P 500 index gained 15.23 points to 1,603.26. The tech-rich NASDAQ Composite jumped 28.34 points to 3,376.22
Gold prices fell to a 34-month low, before trimming some of those losses.
Gold has been dragged down by the market rout accompanying Fed Chairman Ben Bernanke's comments about potentially pulling back on bond buying later this year.
Gold mining companies Randgold Resources and Barrick Gold fell 4% and 7%. The SPDR Gold Shares Trust ETF fell almost 4%.
Shares of Smith & Wesson declined even after the gun maker reported record sales and vowed to keep ramping up manufacturing.
General Mills slipped after the food company reported earnings in line with forecasts but a weak guidance for the year.
Shares of Apollo Group, which owns for-profit University of Phoenix, slid after the company reporting disappointing quarterly profits.
Monsanto reported better-than-expected earnings and reiterated its outlook, and shares turned higher. Bed Bath & Beyond will report after the markets close.
Pandora shares gained ground after analysts at Cowen and Co. upgraded the company's shares to outperform.
Markets have been volatile lately, driven largely by fears that the Federal Reserve could begin to ease its stimulus measures by the end of the year.
But those fears took a backseat following the U.S. Commerce Department's worse-than-expected report on first-quarter gross domestic product, which showed the economy grew just 1.8% during the first quarter. The prior estimate showed an annual increase of 2.4%, and economists were expecting that figure to hold.
Prices for the 10-year U.S. Treasury remained positive, lowering yields to 2.54% from Tuesday’s 2.59%. Treasury prices and yields move in opposite directions.
Oil prices inched up 10 cents to $95.43 U.S. a barrel.
Gold prices collapsed $45.20 to $1,229.60 U.S. an ounce.
