The Toronto stock market was little changed Wednesday with energy stocks pressured by lower crude prices in the wake of higher-than-expected U.S. crude inventories.
The S&P/TSX Composite Index turned from a negative pose early in the day and gained 33.38 points to 11,853.56, after a 127-point tumble on Tuesday that followed moves by China to curtail its economic growth.
China's central bank is raising the proportion of deposits that banks must hold in reserve by half a percentage point to 15% of their deposits. The People's Bank of China also raised the yield it is offering on its one-year bills, its second increase in interbank markets in a week.
China has been a big support to the Toronto market as its recovery boosts commodity sectors, which stand to gain from sales to China's resource-hungry economy.
But analysts point out that the losses this week come after a string of gains that pushed the TSX up almost 2% last week alone.
Among energy issues, Suncor Energy fell 19 cents to $37.68 and Canadian Oilsands Trust stepped back 49 cents to $29.11.
The consumer discretionary sector was also weak, with shares in auto parts maker Magna International Inc. down $2.92 to $59.47 after it said it expects its 2010 sales to be in a range of $19.5 billion U.S. to $20.5 billion U.S., in line with 12 analyst estimates compiled by Thomson Reuters.
Corus Entertainment Inc. shares declined 12 cents to $19.47 even as the company reported a $73.9-million profit in its fiscal first quarter, an 82% improvement that came as advertising revenues began to rebound in November. Corus says its revenues also rose to $222.3 million from $216.8 million a year ago.
Elsewhere in the sector, Cogeco Cable Inc. says it's raising most of its financial targets for 2010 as a result of steady performance at its Canadian operations and signs that its European subsidiary is stabilizing after a period of intense competition. Its shares climbed $2.08 to $36.80.
The Canadian dollar regained 0.80 cents to 96.99 cents U.S.
ON BAYSTREET
All but three of the 14 TSX subgroups were positive to end the day. Metals and mining stocks held sway, gaining 2%, followed by health-care, up 1.4% and global base metals, ahead 1.1%.
Consumer staples were the worst off the three losing groups, off 0.3%, while consumer discretionaries and telecoms slid 0.1% each.
The TSX Venture Exchange picked up 15.49 points to 1,592.66, while the Nasdaq Canada index added 23.09 points to 730.88.
ON WALLSTREET
In New York, stocks rallied late Wednesday, as investors resumed the advance after a one-day selloff, scooping up tech and financial shares despite Google's potential shutdown of its China operations and testimony from major bank executives.
The Dow Jones Industrials gained 53.51 points on the day to finish at 10,680.77. The S&P 500 tacked on 9.46 points to 1.145.68, and the Nasdaq picked up 25.59 points to 2,307.90.
Stocks fell Tuesday after Alcoa's weaker-than-expected profit report and Chevron's warning raised worries about the strength of the fourth-quarter reports.
After that selloff, stocks managed slim gains Wednesday, but were hindered by a selloff in the commodities market and in stocks such as Exxon Mobil and Chevron.
After 2009's huge recovery from the brutal selloff of the financial crisis, gains are going to be harder to come by this year, according to some experts. Some add that while the momentum is still positive, it's going to take some positive profit reports to provide that fundamental component.
Financial shares rallied even as CEOs of the largest financial institutions testified on Capitol Hill about mistakes made in the lead-up to the financial crisis.
Goldman Sachs' Lloyd Blankfein, Bank of America's Brian Moynihan, Morgan Stanley's John Mack and JPMorgan Chase's Jamie Dimon were among those testifying before the bipartisan Financial Crisis Inquiry Commission.
The executives agreed that the banks took on too much risk and that mistakes were made, including underestimating the depth of a housing market implosion. But they also denied being aware at the time that a financial crisis of such magnitude could develop.
The fact that many of the banks that helped fuel the financial crisis are now profiting soundly a year later is a major source of frustration to consumers, especially since taxpayers helped fund their bailouts.
The White House is debating taxing companies that took bailout funds to make sure they pay the money back. President Obama is expected to announce the plan Thursday.
At the same time, the FDIC, the top banking regulator, is considering requiring lenders to pay if they tie compensation to risky practices.
Google shares dipped 1% after the Internet behemoth threatened to pull out of China due to cyber attacks and attempts to access the Gmail accounts of human rights activists. The company said it is one of at least 20 companies that have been attacked.
Google's presence in China is minimal so far. But the Chinese market is considered to be one of the fastest-growing and most lucrative technology markets in the world, begging the question of whether Google will really walk away.
Microsoft, Cisco Systems and other companies are also trying to establish a big presence in the market.
On Tuesday, Yahoo said it is "aligned with Google" in condemning the kinds of cyber attacks the company had experienced from China, but did not say if it had experienced a similar attack.
Merck shares rallied over 4% after brokerage Credit Suisse upgraded it to "outperform" from "neutral" and lifted its 12-month price target on the drugmaker, according to reports.
Economically speaking, during the afternoon, the Federal Reserve released its periodic "beige book" report on the economy. The report showed that economic conditions generally improved in the Fed's 12 districts, but that credit conditions deteriorated.
The December Treasury budget showed a deficit of $91.9 billion U.S., versus $120.3 billion U.S. in November, roughly in line with forecasts for a deficit of $92 billion U.S.
Treasury prices dipped, raising the yield on the 10-year note to 3.78% from Tuesday’s 3.71%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil dropped $1.12 to $79.67 U.S.
Gold prices gained nine dollars to $1,138 U.S.
