The Toronto stock market was little changed Tuesday afternoon as nervousness about supply pushed crude prices close to the $100-U.S.-a-barrel mark and raised worries about the effect of higher oil on global economies.
The S&P/TSX composite index had faded into the red 13.65 points by the closing bell to 14,122.85, as investors also took in a widely-expected move by the Bank of Canada to leave its key interest rate unchanged at 1%.
The Canadian dollar backpedaled 0.36 cents to 102.6 cents U.S.
The bank warned that "the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance."
The loonie had been riding at a three-year high.
The financials sector declined, despite a solid earnings report from Bank of Montreal
BMO reported first-quarter profit rose 18% from a year ago to $776 million or $1.32 cash earnings per share, which beat expectations by a penny. Revenue increased 11% to $3.3 billion, slightly above expectations of $3.2 billion.
BMO shares declined 18 cents to $61.78, but analysts pointed out that this wasn’t a reflection on the bank’s results.
The energy sector as a whole was flat amid the higher crude prices as fighting in Libya continued to unnerve markets with Suncor Energy climbing 16 cents to $45.82, while Imperial Oil slid six cents to $50.42.
Moammar Gadhafi, Libya’s ruler of 41 years, has already lost control of the eastern half of the country since protests demanding his ouster began two weeks ago. He still holds the capital Tripoli and nearby cities.
Gold stocks were the biggest advancer as Barrick Gold Corp. improved by $1.14 to $52.42 while Goldcorp Inc. rose $1.69 to $48.10.
The base metals sector weighed on the market, as Teck Resources lost 86 cents to $52.89 while takeover target Lundin Mining Corp. gained 27 cents to $7.92.
Other data showed that China’s manufacturing boom slowed to a six-month low in February as authorities tightened controls on credit to cool inflation and factories eased output.
The state-affiliated China Federation of Logistics and Purchasing said Tuesday that its purchasing managers’ index, or PMI, dipped to 52.2 last month, from 52.9 in January and 53.9 in December. A weeklong holiday for the Lunar New Year was partly to blame, it said.
In other corporate news, Canada Lithium Corp. shares tumbled 46 cents, or 34.1% to 89 cents on heavy volume of 17.6 million shares after it said Monday that the lithium deposit that it wants to develop near Val D’Or, Que., may not be as big as previously reported.
The Toronto-based company, which recently sold about $126.5 million worth of its shares to finance construction of an open pit mine and processing plant to produce battery-grade lithium carbonate, says it has initiated an outside review.
ON BAYSTREET
The TSX Venture Exchange tacked on 12.47 points to 2,404.01, while the Nasdaq Canada index shed 0.17 points to 820.36.
In Toronto, all but three of the 14 subgroups were lower by day’s end. Global base metals took the biggest hit at 1.7%, real-estate slid 1.3% and metals and mining stocks gave back 1%.
The three gainers were gold, soaring 2.1%, while materials traveled 1.2% higher, and health-care issues eked out a 0.3% gain.
ON WALLSTREET
In New York, stocks continued to slide Tuesday, with all three major indexes down about 1% as oil prices spiked to near $100 a barrel again.
Investors also turned their attention to Federal Reserve Chairman Ben Bernanke's warning that a sustained rise in oil prices may pose a danger to economic growth.
The Dow Jones industrial average collapsed 168.32 points, or 1.4% to 12,058, Alcoa and Caterpillar leading the decline.
The S&P 500 was down 20.89 points to 1,306.33. The tech-rich Nasdaq Composite Index gave back 44.86 points to 2,737.41.
General Motors said total U.S. sales rose 46% last month on an annual basis, while Ford's sales rose 14%. Shares of both U.S. automakers fell almost 3%.
Shares of Japanese automaker Toyota were down 0.7% after the company said sales rose 42% last month from a year earlier, when monthly sales fell 8.7% on recall problems.
Shares of Las Vegas Sands dropped 7% after the casino operator said that it has received a subpoena from the SEC requesting documents related to the Foreign Corrupt Practices Act. The company said it is also being investigated by the Department of Justice.
Shares of J. Crew Group rose 1% after stockholders agreed to adopt the previously announced merger agreement with Chinos, an affiliate of private equity firms TPG Capital and Leonard Green & Partners.
During his semi-annual testimony on monetary policy to the Senate Banking Committee, Bernanke told lawmakers a prolonged increase in oil prices, "would represent a threat both to economic growth and to overall price stability -- particularly if they were to cause inflation expectations to become less well anchored."
The Fed chief added that the central bank will monitor economic developments, and is "prepared to respond as necessary to best support the ongoing recovery in a context of price stability."
But he reiterated that overall inflation remains at very low levels.
Economically speaking, the Institute for Supply Management's manufacturing index rose for a 19th consecutive month, reaching 61.4% -- a level last seen in May 2004.
Treasury Secretary Tim Geithner is scheduled to testify before the House Financial Services Committee on the administration's plan for reforming America's housing finance market.
The price on the benchmark 10-year U.S. Treasury regained lost ground, pushing the yield down to Monday’s 3.41%. Treasury prices and yields move in opposite directions.
Oil for February delivery regained $2.72 to $99.69 U.S. a barrel.
Meanwhile, gold prices surged $20.30, or 1.5%, to settle at $1,429.90 an ounce, a record high.
