Canadian stocks were stuck in the mud Tuesday afternoon, unable to add much to yesterday's strong gains as investors looked ahead to tomorrow's commentary from the U.S. Federal Reserve for hints about the health of Canada's biggest trading partner.
The S&P/TSX Composite index backpedaled 4.67 points on the day to finish the day at 11,541.02.
Traders shrugged off a number of key data points. Canadian new motor vehicle sales increased more than expected in October compared to the previous month, driven by higher sales of North American-built passenger cars.
Rogers Communications was up 61 cents to $30.70. Fellow telecommunications provider Telus Corp. forecast that revenues will increase up to 5% in 2010. Its shares were off a nickel to $32.05.
In earnings, commercial printer and media company Transcontinental reported a $43.1-million profit in the fourth quarter, reversing last year's $94.3- million loss even as revenues dropped 9%. The company's shares were ahead 52 cents to $13.02.
MacDonald, Dettwiler and Associates Ltd. shares were up 12 cents to $41.29 after the company said it was awarded $254-million U.S. contract to provide communication satellite system to National Space Agency of Ukraine.
Information technology provider CGI Group Inc. said it has signed contracts with North American financial institutions for its fiscal fourth quarter worth $1.1 billion, which helped send shares 62 cents higher to $14.01.
In other economic news, Canada's index of leading economic indicators jumped at nearly double the rate economists expected in November, helped along by higher home sales and sales of durable goods.
Statistics Canada's composite leading index rose by 1.3% in November, equaling the largest of its six straight increases.
The advance was led by household demand, while the recovery of demand in the United States gave a boost to manufacturing in Canada.
In another report, the nation’s number crunchers said Canadian labour productivity fell 0.2% in the third quarter, while gross domestic product of business fell 0.1%.
The Canadian dollar was flat 94.25 cents U.S.
ON BAYSTREET
The 14 TSX subgroups were evenly split between gainers and losers, the former group led by information technology, up 1.6%, while energy stocks and utilities were co-runners-up at 0.8%.
The losing groups were gold, down 1.8%, materials and global base metals, off 0.8% each.
The TSX Venture Exchange staggered 3.03 points to 1,422.05, while the Nasdaq Canada index added 5.07 points to 697.67
ON WALLSTREET
In New York, a selloff in bank shares dragged on the Dow Tuesday afternoon, in a choppy session that saw investors struggling amid reports that showed rising inflation and a mixed outlook for manufacturing.
The Dow Jones Industrials ended the day down 49.05 points to 10,452.00, while the S&P 500 fell 6.18 points to 1,107.93, but the Nasdaq skidded 11.05 points to 2,201.05.
Bank of America, JPMorgan Chase and Travelers were among the big financial shares dragging on the Dow. IBM and Procter & Gamble were the Dow's other big losers.
Stocks gained Monday, with the Dow and S&P 500 ending at the highest levels since October 2008 and the Nasdaq closing at the highest point since September 2008. The advance came after
Citigroup said it will repay its government bailout funds and Dubai said it received $10 billion U.S. to cover its debt, easing default worries.
The weak dollar also helped Monday, lifting commodity shares and the stocks of companies that do a lot of business overseas. But the dollar gained Tuesday as concerns about debt-ridden Greece caused investors to pull money out of the euro and put it in the dollar, pressuring stocks modestly.
Stocks rallied for more than nine months off the March lows, with the S&P 500 having gained nearly 65% as of Monday's close. But in the last couple of weeks the progression has been much slower and the trading volume much lighter.
Wells Fargo said late Monday that it will pay back $25 billion U.S. in government bailout money, adding to the list of institutions that are looking to give back funds provided to them during the financial crisis.
Best Buy reported better-than-expected quarterly profit before the start of trading. The electronics retailer also lifted its current-quarter revenue and earnings forecast.
Boeing made the first test flight of its 787 Dreamliner Tuesday, nearly two-and-a-half years after the more fuel-efficient plane was due to fly.
General Motors said it will pay off a $6.7-billion U.S. federal loan by June, ahead of its deadline for repayment under terms of the bailout.
Economically speaking, wholesale prices jumped last month, the Commerce Department reported Tuesday, as the Producer Price Index (PPI) rose 1.8%.
Analysts were anticipating the reading to climb 0.8% in November.
So-called core PPI, which strips out volatile food and energy prices, also came in higher than expected, climbing 0.5% after falling 0.6% in October.
In other manufacturing news, the Federal Reserve said November capacity utilization rose to 71.3% from 70.6% in October. Economists thought it would rise to 71.1%.
The last central bank policy meeting of the year began Tuesday with a decision on interest rates due Wednesday.
The central bankers are widely expected to hold the fed funds rate, a key overnight bank lending rate, unchanged at historic lows near zero, where the rate has stood for a year. But the policy statement could provide hints as to when the Federal Reserve plans to raise interest rates, either next year or in 2011.
The Federal Reserve has kept rates low and pumped trillions of dollars into the economy over the last year in an effort to offset the impact of the worst recession since the 1930s.
Treasury prices dropped sharply, raising yields to 3.59%, from Monday’s 3.52%. Prices and yields move in opposite directions.
The price of a barrel of oil gained back $1.19 to 70.70 cents U.S.
Gold prices slid a dollar to $1,123 an ounce U.S.
