The Toronto stock market was sharply lower Tuesday amid investor disappointment with a mixed bag of earnings reports and the lack of an agreement among American lawmakers on raising the country’s debt limit.
The S&P/TSX Composite Index dropped 135.39 points, or 1%, to end the day at 13,300.60
The Canadian dollar gained 0.43 cents to 106.05 cents U.S.
The telecom sector was down as Rogers Communications Inc. said second-quarter profits slipped 9% to $410 million or 75 cents a share. But the results still came in above analyst expectations on an adjusted basis by four cents. Revenue increased 3% to $3.12 billion, which was also above expectations but its shares lost $1.32 to $36.50.
The financials sector was also a major drag, with Royal Bank down 76 cents to $52.06 while TD Bank fell $1.48 to $78.68.
The energy sector was off as Suncor Energy lost 24 cents to $39.20.
Oilsands operator Cenovus Energy Inc. reported that its quarterly net profits soared to $655 million or 85 cents a share from $183 million or 24 cents a year earlier. Cash flow jumped to $939 million from $537 million. Its shares were down 77 cents to $37.15.
The base metals sector was down as copper prices headed higher with the September contract ahead seven cents to $4.48 U.S. a pound. Inmet Mining fell $3.40 to $66.60 after the miner reported second-quarter profits of $56 million on Monday, up from $51 million a year ago.
But net income attributable to Inmet shareholders dropped 18% from $56 million, or 86 cents per share, from $68.5 million, or $1.22 per share in the second quarter of 2010.
First Uranium Corporation shares tumbled nine cents or 15.25% to 50 cents after it said the South African National Nuclear Regulator has ordered the company to stop disposing waste at its tailings operations in the country. The Toronto company operates gold and uranium mines in South Africa.
The industrials sector was down with shares in Canadian National Railway Co. down $3.19 to $72.05 after it reported quarterly earnings of $538 million or $1.18 a diluted share, up from $534 million or $1.13 a year earlier. Revenues at Montreal-based CN rose 8% to $2.26 billion.
Excluding one-time items, adjusted diluted earnings per share for the quarter rose to $1.26 from $1.13, which was slightly above analyst expectations.
The gold sector was down as Goldcorp Inc. faded 63 cents to $49.96.
The tech sector rose as Research In Motion told Twitter followers it will hold a social media event Tuesday night to promote upcoming BlackBerry devices, as the company undertakes severe cost-cutting measures. Its shares were up 67 cents to $25.86 a day after announcing it was laying off 2,000 of its workers.
Information technology company CGI Group Inc. said its third-quarter net earnings rose 37.9% to $118.4 million. Revenue increased 15.1% to $1.04 billion. Diluted earnings per share were rose to 43 cents, surpassing analyst expectations, compared with 30 cents a year earlier. Its shares rose 14 cents to $21.50.
ON BAYSTREET
The TSX Venture Exchange lost 13.11 points to 2,023.52, while the Nasdaq Canada index picked up 5.38 points to 560.28
In Toronto, all but one of the 14 subgroups were pointed downward. Telecoms tailed off 2.1%, industrials suffered 1.7% and financials fell 1.4%.
The lone gainer was in information technology, ahead 0.9%,
ON WALLSTREET
In New York, stocks tumbled late Tuesday, as several disappointing corporate earnings and ongoing worries over the U.S. debt ceiling weighed on investor sentiment.
The Dow Jones Industrials fell 91.50 points to close Tuesday at 12,501.30
The S&P 500 dropped 5.49 points to 1,331.94. The Nasdaq Composite Index stumbled 2.84 points to 2,839.96
The Dow was dragged lower by industrial conglomerate 3M, whose shares sank 5%, after the company's quarterly results missed some analysts' expectations.
Despite beating expectations for quarterly earnings, shares of several companies fell -- such Netflix, UPS and Ford -- as investors remain concerned on companies' outlooks.
Up until late Tuesday, investors were torn between two forces: an earnings season that has been generally positive, and concerns tied to the continuing battle over the United States' debt ceiling. Of the S&P 500 companies who have reported their quarterly results so far -- 75% have beaten expectations, according to data by Thomson Reuters.
The rhetoric over the debt ceiling ratcheted up further late Monday, after President Obama and House Speaker John Boehner each used primetime television addresses to make their case to the American people.
The president singled out House Republicans for intransigence, and said the political showdown is "no way to run the greatest country on Earth." But at the end of the night, there was no clear legislative path forward.
Months of increasingly tense negotiations have failed to bring a deal that can win approval from all of the necessary players -- the Republican-led House, Democratic-led Senate and the White House.
Netflix shares sank 10% on Tuesday, making it the worst performer on the S&P 500 and Nasdaq. The video rental company spent much of its Monday earnings release discussing problems -- namely, a recent price hike that launched thousands of online complaints.
British oil company BP reported a profit of $5.6 billion U.S. -- a stark contrast to last year's second-quarter loss of $17.2 billion U.S., when the company was struggling with the Gulf oil spill. Despite its profitable rebound, shares slid 1.5%.
Ford reported better than expected quarterly earnings of $2.4 billion U.S., as sales climbed 13% to $35.5 billion U.S. However, shares for the auto giant fell 2% in afternoon trading.
International shipping company UPS -- often considered an economic bellwether -- also posted better-than-expected earnings, as strong shipping volumes in China and Europe helped offset flat sales here in the U.S. Shares were down 4%, however.
Video game publisher Electronic Arts and online retailer Amazon.com are scheduled to report quarterly results after the closing bell.
Economically speaking, the S&P Case-Shiller home price index rose a better-than-expected 1% in May versus the 4.4% decline that economists had forecasted.
New home sales dropped to an annual rate of 312,000, according to a report from the Commerce Department. The data was slightly worse than the 325,000 units economists had predicted.
The Conference Board said consumer confidence rose to a reading of 59.5 in July, up from 57.6 in June. Economists had expected consumer confidence to slide to 55.3.
Bond prices improved Tuesday, pushing the yield on benchmark 10-year notes down to 2.95% from Monday’s 3.00%. Treasury prices and yields move in opposite directions
Oil for August delivery gained $1.81 to $99.51 U.S. a barrel.
Gold futures for August delivery were up $2 to $1,614.10 U.S. an ounce.
