Resource stocks led the way to a lower session on the Toronto stock market Wednesday amid conflicting reports about European efforts to agree on a package of measures to deal with the euro-zone’s debt crisis.
The S&P/TSX composite index tumbled 203.61 points, or 1.7%, to end the session at 11,849.50
The Canadian dollar went south 0.57 cents to 98.02 cents U.S.
Markets had enjoyed a solid, late session gain Tuesday as risk appetite improved following a report in Britain’s Guardian newspaper that suggested France and Germany were putting the finishing touches on a massive expansion of the region’s bailout fund, possibly to €2 trillion ($2.8 trillion U.S.) from the current €440 billion.
However, there was little enthusiasm for expanding the rally since traders have felt let down in the past by reports that a comprehensive solution to the debt crisis was at hand.
Earlier this week, German officials, including the finance minister, cautioned investors against believing that Sunday’s summit of euro-zone leaders will mark a definitive turning point in the crisis.
And on Wednesday, Dow Jones news service reported that an agreement to raise the bailout fund hasn’t been reached.
The energy sector was slightly lower while Canadian Natural Resources moved down 39 cents to $32.57.
The base metals sector was down as the December copper contract in New York was down seven cents to $3.29 U.S. a pound. Teck Resources fell $1.83 cents to $34.12 and Ivanhoe Mines dropped $1.47 to $16.81.
The gold sector fell while Goldcorp Inc. shed $2.42 to $45.34 and Barrick Gold Corp. faded $2.12 to $45.68.
Agnico-Eagle Mines Ltd. shares tumbled $10.62 or 18.3% to $47.35 after the miner said it is suspending operations at its flooded Goldex mine in the Abitibi region of Quebec and will take a $170-million U.S. after-tax writedown on the property in the third quarter.
Wi-LAN Inc. has boosted its takeover bid for rival patent house Mosaid by 11% to $42 per share, raising the total offer to $500.6 million. Wi-LAN shares dipped one cent to $6.15 while Mosaid shares were up $1.41 to $42.27.
On matters economic, Statistics Canada reported this morning that its composite leading index was fairly static in September, the fourth straight month in which that was the case. In September, six of the 10 components continued to expand, the same number as in August.
ON BAYSTREET
The TSX Venture Exchange shed 25.93 points to 1,525.82 while the Nasdaq Canada index gave back 11.56 points to 435.97
All but two of 14 Toronto subgroups were lower on the day. The metals and mining group doffed 5.5%, while gold suffered 5.2% and materials fell 5.1%.
The two gainers were health-care, up 0.4%, while real-estate progressed a mere 0.2%.
ON WALLSTREET
In New York, stocks moved definitively lower Wednesday afternoon, following a pessimistic report about regional economic activity from the Federal Reserve.
The Dow Jones Industrials let go of 72.43 points to 11,504.60
The S&P 500 slid 15.50 points to 1,209.88, while the Nasdaq Composite Index stumbled 53.39 points to 2,604.04.
The three "E"s continue to dominate. But without any new news out of Europe, investors had been focusing on the latest earnings reports, keeping stocks mostly near the breakeven line for much of the day.
Stocks came under pressure in the afternoon after the Fed's so-called "Beige Book" painted a picture of an economy losing steam. The report caused investors to walk but not run out of the market.
Apple's earnings miss dragged the tech sector lower, while insurer Travelers was among the few standouts giving investors hope for the insurance industry's prospects.
Travelers sparked a rally among insurance stocks when it reported earnings Wednesday. The company told investors that consumers were willing to accept higher insurance premiums.
Travelers' stock surged 7%. Chubb, Aetna, and Allstate all followed suit, moving up between 1% and 4%.
Still, market participants said that trading was relatively light Wednesday, with many investors remaining gun shy, following the recent volatile roller coaster moves.
On Tuesday, stocks surged into the close, following a report suggesting that Europe's bailout fund may get a big boost.
After the market close Tuesday, Apple, the maker of Macs and iPhones, reported a 39% increase in third quarter sales to $28.3 billion U.S.. But the figures fell short of forecasts.
Morgan Stanley, which has had investors worried about its exposure to Europe, posted a solid $2.2-billion U.S. profit before Wednesday's opening bell.
Also late Tuesday, Dow component Intel announced earnings that beat analysts' estimates and sales that hit a new high.
And Yahoo said reported third-quarter sales and earnings that fell compared to last year, but came in ahead of analyst forecasts.
Early Wednesday, Dow component United Technologies beat revenue estimates.
BlackRock, the world's largest money manager, surpassed forecasts on both sales and profit for the quarter.
Shares of Abbott Laboratories rose after the medical company said it will split into two separate publicly traded companies. One company will be focused on medical products, and retain the name Abbott, and the other will focus on research-based pharmaceuticals, with a name to be revealed at a later date.
American Express and eBay were to announce quarterly earnings after the markets close.
On the economic front, inflation came in as expected in September, with the Consumer Price Index rising 0.3% during the month.
Core CPI, which strips out volatile food and energy prices, rose 0.1% in September.
For the year, CPI is up 3.9%, the biggest annual change in three years.
A separate report showed housing starts were stronger than expected in September, while permits for future building fell.
In the afternoon, the Federal Reserve will release its latest Beige Book report on the state of the economy in the nation's regions.
On Tuesday, Moody's Investors Service downgraded Spain's government bond ratings to A1 from Aa2. This follows similar action taken by Standard & Poor's last week.
The price on the benchmark 10-year U.S. Treasury dipped, lifting the yield to 2.16% from 2.15% late Tuesday. Treasury prices and yields move in opposite directions.
Oil for October delivery lost $2.17 to $86.17 U.S. a barrel.
Gold prices skidded $10.95 to $1,641.85 U.S. an ounce.
