TSX DOWN AMID STRONG U.S. CONSUMER FIGURES
TORONTO • The Toronto stock market closed lower Tuesday despite strong U.S. housing and consumer confidence figures.
The S&P/TSX composite index dropped 143.26 points to 14,962.37. The Canadian dollar was down 0.15 of a cent to US93.08¢.
U.S. indexes also backed off with the Dow Jones industrials down 119.13 points at 16,818.13, while the Nasdaq was 18.32 points lower at 4,350.36 and the S&P 500 index declined 12.63 points to 1,949.98.
Traders digested data showing that U.S. home prices rose in April from a year ago at the slowest pace in 13 months, reflecting a recent drop-off in sales. The Standard & Poor’s/Case-Shiller 20-city home price index rose 10.8% in April from 12 months earlier, down from 12.4% the previous month and the smallest increase since March 2013.
But the U.S. Commerce Department reported that new home sales surged 18.6% in May to an annual rate of 504,000, the fastest pace in six years. That was much higher than the 440,000 reading that economists had expected.
Most TSX sectors were negative with the gold sector falling 2.75% after rising about 6% over the last half dozen sessions. Gold prices and stocks have steadily advanced this month because of geopolitical worries centred on Iraq and tensions between Ukraine and Russia. The August bullion contract in New York rose US$2.90 to US$1,320.90 an ounce.
The energy sector was 2.44% lower as oil prices edged lower with the August crude contract on the New York Mercantile Exchange down 14¢ to US$106.03 a barrel.
Oil prices had risen steadily over the past couple of weeks amid a rising insurgency in Iraq. But prices fell on Monday as fears receded that the insurgency would greatly affect the country’s oil production and exports.
Still the energy sector is the strongest TSX performer, up about 5% over the last month alone as investors focus on the greater certainty offered by the Canadian oil patch.
“It’s shining a light on that issue,” said Ben Jang, portfolio manager at Nicola Wealth Management in Vancouver.
“Obviously, war is a terrible thing but, like the song, ‘War: What Is It Good For?’ — it is good for the Canadian equity market, really.”
The base metals sector was down 1.68% while copper was unchanged at US$3.15 a pound following a three-cent rise Monday sparked by strong Chinese data.
On the corporate front, Bell Media, the radio and television division of BCE Inc., is laying off as many as 120 employees, or about 5% of its Toronto workforce, due to “financial pressure” in its advertising and subscription TV services. BCE shares dipped 20¢ to $48.33.
AGF Management Ltd. shares were down 50¢ to $12.28 as the mutual fund operator and wealth management company reported it had $14.5-million or 17¢ per share of net income in its fiscal second quarter, contrasting with a yearearlier loss of $10.4-million or 12¢ per share.
Revenue from continuing operations was down from a year earlier, dropping to $119.1-million from $126.9-million.