Toronto stocks dipped lower on Wednesday. Stocks pared earlier losses after the U.S. Federal Reserve gave an upbeat economic assessment as it left interest rates unchanged.
Soon before the closing bell, the S&P TSX Composite index had sunk 68.77 points to 11,516.96. The market closed yesterday at an 11 1/2-month high.
Technology stocks rose, as Research in Motion rallied 2.1% to $92.69 ahead of its quarterly earnings report tomorrow.
Mining stocks are up, with HudBay gaining 2.5% to $11.58 after being upgraded to "buy" from "hold" at TD Newcrest.
Gold stocks lost ground, as New Gold subsided 4.1% to $3.71, Iamgold dropped 4.7% to $15.07 and Agnico-Eagle Mines sank 3.1% to $72.50.
Northern Dynasty Minerals declined 3.4% to $7.86 after the company announced that the Pebble Limited Partnership Board of Directors has approved an additional $10.1-million-U.S. budget to advance the Pebble Project.
UEX Corp. announced that Stephen Sorensen, its president and chief executive officer, will retire, effective November 1. Sorensen will also resign as a director of the company. The stock was down 3.9% to $1.24.
Bank of Montreal gained 0.6% to $54.17 as the lender has received preliminary approval to incorporate in China, according to the Globe and Mail.
The Canadian dollar subsided 0.55 cents to 92.96 cents U.S.
ON BAYSTREET
Eight of the 14 TSX subgroups went south, weighed down by gold, off 2.6%, followed by materials, down 1.6% and energy stocks, slipping 1.4%.
The half-dozen gainers were led by information technology, up 2.1%, consumer staples, picking up 0.9% and health-care, advancing 0.8%.
The TSX Venture Exchange gave back 3.70 points to 1,277.93, while the Nasdaq Canada index tacked on 8.28 points to 850.96.
ON WALLSTREET
In New York, stocks turned mixed late Wednesday, backing away from nearly one-year highs accrued after the Federal Reserve held a key short-term interest rate near zero and said the economy is starting to recover.
The Dow Jones Industrials stumbled 81.32 points to end up at 9,748.55. The S&P 500 index faded 10.79 points, to 1,060.87. The Nasdaq composite index gave back 14.88 points to 2,131.42.
The Federal Reserve kept the fed funds rate, a key short-term bank lending rate, at a level near zero, as expected. The announcement was made at the end of its two-day policy meeting.
In the statement the bankers said that "economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased."
But the bankers also noted that consumer spending has remained under pressure due to the rough jobs market and still-tight credit conditions. Last week Federal Reserve chief Ben Bernanke said the recession was very likely over, but the labour market still has a long way to go.
In light of the continued challenges, the Fed reiterated Wednesday that it was likely to keep the fed funds rate at the historic lows for the foreseeable future.
Investors were also looking for more on how the Fed plans to eventually wind down programs that have pumped as much as a trillion dollars into the economy to cushion the blow of the recession.
To that end, the Fed said it will stretch its purchases of $1.25 trillion U.S. of mortgage-backed securities from Freddie Mac and Fannie Mae through the end of the first quarter of 2010.
Previously, the program was set to end at the end of this year.
The major indexes have repeatedly closed at near one-year highs over the last two weeks. Despite rampant calls for a September selloff, investors have used any modest pullback as an opportunity to get back into stocks at a slightly lower level. Analysts say fears of having missed the boat on the rally are driving the latest spate of gains.
Since bottoming at a 12-year low March 9, the S&P 500 has gained 58.4% and the Dow has gained 50%, as of Tuesday's close. After hitting a six-year low, the Nasdaq has gained 69.2%.
Stocks have risen during this period on signs that the economy is slowly starting to recover and on extraordinary amounts of fiscal and monetary stimulus.
American Airlines and US Airways Group both slipped after announcing plans to raise cash, dragging down the airline sector in the morning.
American said it has priced its offering of 48.5 million shares of common stock, as well as $400 million U.S. in five-year notes, with both offerings due to close Monday. The two sales should give American about $770.5 million U.S. after fees and expenses. American parent AMR fell 5%.
US Airways Group said it will sell 26.3 million shares of its common stock to Citigroup, the offering's underwriter, with the sale due to close Monday. US Airways fell 10.7%.
In other company news, General Mills reported higher quarterly earnings that topped forecasts and boosted its full-year outlook, due to strong sales of Cheerios, Trix and its other cereal brands. Shares rose over 4%.
Treasury Secretary Timothy Geithner told a House committee that U.S. economic growth appears to be picking up, but that reforms must be enacted to fix a broken system. He was testifying at a House Financial Services committee hearing on regulatory reform.
At least one million people could be eligible for an additional 13 weeks of unemployment benefits, following a House of Representatives bill approved Tuesday night. The Senate is expected to take up the issue soon, although it faces some questions about how it should be funded.
Treasury prices shot higher, lowering the yield on the benchmark 10-year note to 3.40% from Tuesday’s 3.48%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil plummeted $2.79 to $68.42 U.S.
Gold prices were down a dollar to $1,014 U.S. an ounce.
