The Canadian stock market edged between small gains and losses Tuesday, weighed by resource stocks including Sino-Forest, with a rebound in energy stocks providing support.
The S&P/TSX Composite Index ended the day in the red by 35.74 points to 13,282.92
The Canadian dollar gained 0.50 cents to 102.51 cents U.S.
Among materials stocks, Sino-Forest Corp. dropped 33.3% to $4.07. On Thursday Sino-Forest was accused of fraudulent accounting practices and exaggerating its assets by Muddy Waters LLC, a short-selling research firm.
The operator of tree plantations in China lost 71% of its stock value over the next two trading sessions. On Monday the company promised to release evidence of its assets and hire an independent accounting firm, resulting in a 17% rebound in its shares.
Moody’s also announced on Tuesday that Sino-Forest ratings would be reviewed for a possible downgrade.
Talisman Energy Corp. was one of the biggest risers, up 2.7% to $19.50 as it continued to shop its 25% share of a major oil block in the Timor Sea.
Financials were beginning to slip, as the Royal Bank of Canada was down six cents at $54.37, while Manulife Financial Corp. fell 1.1% to $16.09.
Mining stocks were also declining, as Teck Resources Ltd., Canada’s largest producer of diversified metals, was down 1.1% to $47.21.
On Monday, the TSX Composite fell nearly 200 points, pressured by concerns that growth in the U.S. -- which takes 75% of Canada’s exports -- was stalling.
ON BAYSTREET
The TSX Venture Exchange turned downward 10.53 points to 2,004.02 while the Nasdaq Canada index eased 6.86 points to 613.57
In Toronto, losers outnumbered gainers eight to six among the 14 subgroups.
Information technology stocks tottered 1.2%, while materials suffered 0.8% and financials doffed 0.6%.
The half-dozen gainers were led by industrials, up 0.6%, energy stocks, gaining 0.3%, and global base metals inched up 0.2%.
ON WALLSTREET
In New York, stocks skidded below breakeven Tuesday, lengthening a recent string of losses, as investors digested comments from Federal Reserve Chairman Ben Bernanke about the state of the economy.
The Dow Jones Industrial Average fell 19.15 points to end the day at 12,070.80
The S&P 500 tripped 1.23 points lower to 1,284.94. The Nasdaq Composite Index gave back one point, to 2,701.56.
Among the Dow’s 30 components, Alcoa and Intel led the blue-chip index higher, while Cisco was the main drag.
The Dow and S&P 500 have both declined about 5% since the start of May amid a series of disappointing economic reports.
Ford Motor plans to boost worldwide production 50% by mid-decade, to eight million vehicles a year.
Ford plans to ramp up production on small vehicles and focus on emerging markets. Shares of the automaker rose about 1%.
Shares of International Paper gained 1% after the company offered to buy Temple-Inland for $3.38 billion U.S. in cash late Monday. Temple-Inland's board rejected the offer; its stock soared 42%.
The offer helped lift shares of other paper companies, including Weyerhaeuser
Shares of Regions Financial perked up nearly 2% following an announcement that its banking unit will buy a $1-billion-U.S. credit card portfolio from FIA Service.
Tiffany & Co. rose nearly 2% amid speculation that the owner of rival jeweler Cartier is interested in buying the company.
After the closing bell, home builder Hovnanian Enterprises was slated to report its second-quarter results. The company is expected to post a loss of 51 cents U.S. a share on revenue of $263 million U.S.
Stocks fell Monday, as investors weighed losses in the financial sector with recent downbeat economic data.
A variety of reports, namely Friday's disappointing jobs data, have signaled a slowdown in the recovery and that's making investors nervous.
In addition, the Federal Reserve's $600-billion U.S. stimulus will run out later this month.
Bernanke spoke Tuesday before the International Monetary Conference, and twice called the job market "far from normal" and conceded, "the economy is still producing at levels well below its potential."
But he also said the factors behind recent weakness are likely to fade in coming months.
The economy is still feeling the lingering effects of Japan's earthquake and tsunami, he said.
And surging oil prices -- which he blames on stronger demand from emerging markets -- are likely to stabilize.
Economically speaking, U.S. consumers increased their debt by a seasonally adjusted 3.1% annual rate in April, the seventh straight monthly gain, the Federal Reserve reported Tuesday. Total consumer debt increased $6.25 billion to $2.43 trillion in April. The gain was larger than Wall Street economists had expected.
The price on the benchmark 10-year U.S. Treasury fell, with yields rising to 3.01% from 3.00% late Monday. Treasury prices and yields move in opposite directions.
Oil for July delivery hiked 28 cents to $99.29 U.S. a barrel.
Gold futures for August delivery fell $3.80 to $1,543.20 U.S. an ounce.
