Equity markets in Toronto took a pasting on Wednesday, as a U.S. provisional two-year budget agreement compounded expectations the Federal Reserve will soon start scaling back its stimulus.
The S&P/TSX composite index subtracted 73.35 points to begin Wednesday at 13,250.66
The Canadian dollar faded 0.06 cents to 94.25 cents U.S.
Hudson's Bay Co posted a bigger third-quarter net loss, mainly due to costs related to its acquisition of U.S. retailer Saks, but reported slightly higher same-store sales from its Lord & Taylor chain. Bay shares slid 74 cents, or 3.7%, to $19.25.
Encana Corp, Canada's largest natural gas producer, said it would boost liquids production by 30% in 2014 as part of new Chief Executive Doug Suttles' plan to focus spending on regions rich in gas liquids and oil. Encana shares took a dive of 84 cents, or 4.1%, to $19.54.
Canadian National Railway said on Tuesday it is targeting double-digit percentage growth of earnings per share in 2014, and expects capital spending to rise about 5% to $2.1 billion next year. CN shares backtracked 74 cents to $58.81
ON BAYSTREET
The TSX Venture Exchange slid 1.42 points to 902.57
All 14 TSX subgroups were negative to begin the session, with telecoms dipping 0.9%, global base metals weakening 0.8%, and energy, down 0.6%.
ON WALLSTREET
Stocks fell short of breakeven early Wednesday as a new U.S. budget deal raises the chances that the Federal Reserve might begin scaling back its support for the economy.
The Dow Jones Industrials shed 61.87 points to 15,911.26
The S&P 500 index dropped 6.18 points to 1,796.44. The NASDAQ retreated 13.61 points to 4,046.89
Costco shares dropped after the company reported quarterly profit s that fell just short of analysts' expectations.
Shares of MasterCard rose after the company said it would increase its quarterly dividend by 83% and announced a share buyback program. The company also announced a 10-for-1 stock split effective in January.
Smith & Wesson shares jumped a day after the gun maker reported quarterly earnings that beat expectations.
Congressional negotiators reached a bipartisan budget compromise late Tuesday that would prevent another government shutdown, if approved by the House and Senate. The deal would set spending levels, reduce the deficit and relieve some of the arbitrary, forced spending cuts.
Some analysts say the deal could make the Fed more likely to announce it will begin trimming its $85-billion-U.S.-a month bond purchases as early as next week. Fed chairman Ben Bernanke has said repeatedly that uncertainty about fiscal policy is a threat to the economy.
Prices for 10-year U.S. Treasuries stepped backward, raising yields to 2.83% from Tuesday’s 2.80%. Treasury prices and yields move in opposite directions.
Oil prices dipped 45 cents to $98.06 U.S. a barrel.
Gold prices shrank $1.40 to $1,259.70 U.S. an ounce.
