Toronto's main index fell back in rangebound trading Tuesday afternoon, amid fluctuating commodity prices, as traders eyed the U.S. Federal Reserve's two-day meeting in which the Fed is widely expected to leave interest rates unchanged at record lows near zero.
The S&P TSX Composite Index dumped 138.14 points, or 1.2%, on the day to 11,797.94
Energy producer Encana shed 3.1% to $34.16 and base metals miner First Quantum Minerals dropped 3.3% to $62.47.
In the financial sector, TD Bank sank 0.8% to $73.05, but TMX Group was up 1.6% to $28.55.
Barrick Gold added 0.3% to $46.02 and Iamgold gathered 0.3% to $18.50.
Goldcorp edged down 0.4% to $45.19. The senior gold producer said it completed construction of a sulphide processing line, having a capacity of 50,000 tonnes per day, at one of its Mexican mines ahead of schedule.
Telecom stocks were also among the gainers. Rogers Communications added 0.5% to $37.15 and Telus was ahead 0.4% to $40.48.
Biovail rose 13.3% to $19.29, continuing its advance for a second day after the drugmaker announced a merger deal with U.S. firm Valeant Pharmaceuticals International.
Life sciences company MDS gained 1% to $8.89
Sino-Forest Corp. subtracted 2.4% to $17.37. The China-focused forest plantation operator announced plans to increase its stake in Hong Kong-based investment holding company Omnicorp, by purchasing 230 million of the latter's subscription shares for nearly $53.7 million.
In economic news, Statistics Canada said the consumer prices index (CPI) rose 1.4% year-over-year in May following a 1.8% increase in April. Economists were expecting CPI to rise to 1.3% year-over-year in May.
Energy prices rose 6.2% over the 12 months in May against a 9.8% increase for the year to April.
Excluding energy, the CPI rose 1.0% in May, after rising 1.1% in the previous month. However on a seasonally-adjusted monthly basis, the CPI eased 0.1% in May after remaining flat in the previous two months.
The Canadian dollar moved 0.47 cents lower to 97.22 cents U.S.
ON BAYSTREET
All but two of the 14 TSX subgroups were lower Tuesday. Metals and mining stocks gave back 3.2%, followed by energy stocks, off 2.3% and global base metals, down 2.2%.
The lone two gainers were health-care issues, gaining 3.3%, and gold, up 0.2%.
The TSX Venture Exchange subtracted 15.09 points to 1,457.94 while the Nasdaq Canada index stepped back 3.92 points to 673.11
ON WALLSTREET
In New York, slipped Tuesday, giving up earlier gains in a very choppy session, amid a worse-than-expected existing home sales report and the latest on the European debt crisis.
The Dow Jones industrial average collapsed 148.99 points, or 1.4%, to end the day at 10,293.52.
The S&P 500 index stumbled 17.89 points to 1,095.31. The Nasdaq composite index fell 27.29 points to 2,261.80.
Trading was volatile throughout Tuesday's session, with an early advance petering out after the release of the housing market report and amid the ongoing debt crisis.
Oil company shares tumbled in the afternoon amid the continued fallout from the BP oil spill. A judge ruled to lift the six-month ban on deep water drilling instigated in the wake of the spill, but the Obama administration has vowed to appeal the lifting of the ban.
BP, Transocean, Anadarko Petroleum, Hallliburton and Schlumberger were among the big decliners.
Worries that the economy could be heading into a so-called double-dip recession pummeled stocks for six weeks through early June, with the major indexes all losing close to 14%.
Since then, stocks have bounced back about 6% but trading volume has been weak, reflecting both light summer activity and the lack of conviction on the part of buyers.
Stocks initially rose Monday after China said it would let its currency rise versus the dollar, a move that could boost U.S. exports and manufacturing. But the market slipped by the close as the recent trend of last-hour volatility returned.
Declines were broad based, with 26 of 30 Dow stocks falling, led by Boeing, Caterpillar, Chevron, Hewlett-Packard, IBM and Home Depot
The transportation sector was hit pretty hard, with truckers, railroads and airlines dragging down the Dow Jones Transportation Average by 3.5%.
Among stock movers Tuesday, Apple shares gained after confirming that it sold three million iPads in less than three months. Amazon.com also bounced after sliding Monday on news that it was cutting the price of its Kindle e-reader to keep up with a competitive marketplace.
Economically speaking, existing home sales fell to a seasonally-adjusted annual unit rate of 5.66 million in May, the National Association of Realtors reported. That was down from a 5.77-million-unit rate in April and short of forecasts for a rise to 6.1 million units.
In other news, White House budget director Peter Orszag is planning to resign, an administration official told CNN. He'll leave in July.
Central bank policy makers are meeting Tuesday and Wednesday with an announcement expected Wednesday afternoon regarding interest rates and the economy.
Policymakers are widely expected to hold the Fed Funds rate, a key overnight bank lending rate, steady at historic lows near zero and to indicate that they will continue to do so for the foreseeable future.
Of more interest will be the statement and what the Fed says about the economic outlook, particularly amid concerns that the bankers have run out of ways to prop up the economy.
Economists widely expect the Fed to keep rates at historic lows but there are growing concerns that policymakers have run out of ways to jumpstart a slumping economy.
Treasury prices shot up sharply, lowering the 10-year note's yield to 3.17% from Monday’s 3.24%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil subsided 98 cents to $77.63 U.S.
Gold prices gained eight dollars to $1,245 U.S. an ounce.
