Canadian stocks fell Tuesday, ending three straight days of gains, even after a bigger-than-forecast increase in U.S. retail sales signaled consumer spending will support the economic recovery.
Toronto’s S&P/TSX composite index tailed off by day’s end 15.78 points to 13,280.08. The Canadian dollar gained 0.13 cents to 99.36 cents U.S.
The index rose 2.7% this month through yesterday as oil rallied 5.4% and copper 10%. The index gained as China refrained from raising interest rates even after reporting record exports and manufacturing growth that surpassed most economists’ estimates.
Telus Corp rose after forecasting 2011 earnings of $3.50 a share to $3.90 a share. Analysts had estimated profit of $3.58 a share. Telus gained 0.7% to $46.71. BCE Inc., Canada’s largest phone company, advanced 0.7% to $35.88.
Most S&P/TSX energy companies climbed a day before the U.S. Energy Department releases oil-inventory data for last week. Stockpiles fell 2.5 million barrels from 355.9 million barrels a week earlier, according to the median of 16 analyst estimates in a Bloomberg survey.
Nexen increased 0.6% to $22.44. Imperial Oil Ltd., Canada’s second-largest energy company, rose 1.3% to $38.72.
Penn West Energy Trust, Canada’s second-biggest energy trust, climbed 2.5% to $23.14 after an analyst at Credit Suisse Group AG, raised his rating on the units to "outperform" from "neutral."
TransGlobe Energy Corp., which produces oil and gas in Egypt and Yemen, plunged 10.9% to $15.20 after announcing a 28% increase in its capital budget for next year.
First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, lost 1.1% to $115. Teck Resources Ltd., the country’s biggest base-metals and coal producer, nipped ahead 0.2% to $57.85.
Agnico-Eagle Mines Ltd., Canada’s fifth-largest gold producer, fell 0.6% to $82.98 after Brian T. MacArthur, an analyst at UBS AG, reduced his rating on the shares to "neutral" from "buy." The stock has dropped six straight days, the longest streak since October 2009.
Minefinders sank 7.2% from a 10-month high to $10.87. The company, which had 66 million shares outstanding on Nov. 30, said it will sell 13.7 million shares at $11.10 a share.
Franco-Nevada Corp., which owns gold, oil and gas royalties in North America, rallied 3.8% to $33.37 after at least three analysts raised their ratings on the shares to "buy." The company announced the $830-million acquisition of Gold Wheaton Gold Corp. yesterday.
On the economic ledger, Statistics Canada said Canada's composite leading indicator rose by 0.3% in November from October, pushed higher by stronger housing and an increase in manufacturing demand. Analysts surveyed by Reuters had forecast, on average, an increase of 0.5%. Statscan revised October's gain to 0.3% from an initial 0.2% gain.
Elsewhere, the nation’s number crunchers also said labour productivity in Canada unexpectedly increased by 0.1% in the third quarter of 2010, reflecting a modest increase in growth with no change in the number of hours worked. Markets had expected a 0.1% decline in productivity.
ON BAYSTREET
The TSX Venture Exchange shed 13.05 points to 2,117.70, while the Nasdaq Canada index also lost 4.40 points to 758.01
In Toronto, the 14 subgroups were evenly split between gainers and losers, the former group headed by consumer staples, up 0.5%, while industrials and health-care issues added 0.3% each.
The seven laggards were weighed mostly by consumer discretionaries, off 0.4%, while metals and mining were off 0.3% and global base metals eased 0.2%.
ON WALLSTREET
In New York, stocks eased off earlier gains Tuesday afternoon, as investors found little reason to jump into the fray after the Fed kept rates steady and left its bond-buying plan alone.
The Dow Jones Industrials pointed upwards 47.98 points to close at 11,476.50
The S&P 500 moved up 1.13 points to 1,241.59. The Nasdaq Composite Index gained 2.81 points to 2,627.72.
About two-thirds of the 30 Dow issues advanced, with Kraft Foods, AT&T, Johnson & Johnson and Microsoft leading the way.
Stocks had rallied out of the gate Tuesday morning, following a better-than-expected retail sales report from the U.S. Commerce Department, and held onto gains for most of the afternoon.
Investors remain somewhat cautious as they wait for Congress to extend the Bush-era tax cuts. The compromise between President Obama and Republicans in Congress could face a final Senate vote Tuesday, after passing a key test Monday.
An extension of the Bush-era tax cuts would keep cash in the wallets of Americans. Since consumers are responsible for the lion's share of spending in the U.S., confident consumers willing to spend is key to an economic recovery.
Best Buy shares slid 16%, after the home electronics retailer lowered its fiscal year outlook and posted a 3.3% decline in quarterly same-store sales.
Shares of General Electric edged higher after the company released presentation slides ahead of its annual investors meeting that reiterated the company's upbeate outlook. GE said it "will deliver solid earnings growth in 2010, 2011 and beyond," as its performance continues to strengthen.
Economically speaking, the Federal Reserve did as expected and held interest rates near 0%, where they have been since the financial crisis took hold in 2008.
The central bank also maintained its rhetoric on the economy, saying that although it is recovering, the pace is not fast enough to combat the unemployment rate.
The Fed said it is moving ahead with its plan to pump $600 billion U.S. into the economy, known as quantitative easing or QE2, and did make any changes to the program.
Government reports on retail sales and inflation at the wholesale level came out before the market opened.
A report on retail sales was better than expected on strength in gasoline prices and clothing sales: U.S. retail sales rose 0.8% in November the Commerce Department said, better than the 0.5% that economists were expecting, according to consensus estimates from Briefing.com.
Excluding the automotive sector, sales popped 1.2%, more than the 0.6% increase economists had been expecting.
The producer price index for November increased 0.8% in November, more than the 0.5% gain that was expected. Core PPI -- which excludes food and energy prices -- rose 0.3%, a larger increase than the 0.2% expected.
After the market opens, another report is expected to show business inventories grew 1.1% in October.
The price on the benchmark 10-year U.S. Treasury dropped sharply, raising the yield to 3.45% from Monday’s 3.28%. Treasury prices and yields move in opposite directions.
Oil settled back 51 cents a barrel to $88.12 U.S.
Gold futures for February delivery rose $1.30 to $1,399.30 U.S. an ounce.
