TSX slides for third ses­sion

The Guardian (Charlottetown) - - BUSINESS - THE CANA­DIAN PRESS

The Toronto Stock Ex­change closed lower for the third straight ses­sion on Tues­day as in­vestors di­rect their at­ten­tion back to the fun­da­men­tals of the Cana­dian mar­ket.

The S&P/TSX com­pos­ite in­dex lost 49.31 points to close at 14,376.24 af­ter start­ing the day in the black.

Allan Small, se­nior in­vest­ment ad­viser at Hol­liswealth, said the mar­kets had been pos­i­tive fol­low­ing the res­o­lu­tion of the latest out­break in the Greek debt cri­sis as well as last week's rate cut from the Bank of Canada.

With those head­line-grab­bing de­vel­op­ments out of the way, he said, in­vestors are turn­ing back to look at the re­al­i­ties of the mar­ket and aren't lik­ing what they see.

“We had our rally, and now we're con­cen­trat­ing on other ar­eas of the mar­ket,” he said. “And right now in Canada those other ar­eas are strug­gling.”

In the U.S., the Dow Jones in­dus­trial av­er­age plunged 181.12 points to 17,919.29, while the Nas­daq fell 10.74 points to 5,208.12. The S&P 500 lost 9.07 points to close at 2,119.21.

The Cana­dian dol­lar was up 0.29 of a cent to 77.23 cents US.

Small said the in­crease was the re­sult of day-to-day volatil­ity rather than any sign that the slid­ing loonie had reached bot­tom.

“The di­rec­tion of our dol­lar is def­i­nitely down,” he said. “I'd be sur­prised if we see a big run-up in the dol­lar now.”

The Cana­dian dol­lar could fall even fur­ther against the green­back, Small said, and will re­main weak for the near fu­ture as Canada looks to grow.

“How long it will stay that way re­mains to be seen,” he said. “I think it's de­pen­dent on how long it takes our econ­omy to bounce back from a neg­a­tive first half.”

Econ­o­mists and an­a­lysts have sug­gested that Canada is in a tech­ni­cal re­ces­sion, de­fined as two con­sec­u­tive quar­ters of neg­a­tive growth, although fi­nal sec­ond-quar­ter num­bers have not been re­leased.

Small said the prospect of an in­ter­est-rate hike from the Amer­i­can cen­tral bank this fall is the big­gest driver for the Cana­dian dol­lar's value.

“Our dol­lar is go­ing to trade more on what the U.S. does than what we do here in our coun­try,” he said.

On the com­modi­ties mar­kets, the Septem­ber con­tract for crude oil closed up 42 cents to US$50.86, while the Au­gust con­tract for nat­u­ral gas climbed 5.9 cents to US$2.882.

The Au­gust con­tract for gold ended the day down US$3.50 to US$1,103.50 per ounce.

Small noted that gold has be­come much less im­por­tant as a safe-haven com­mod­ity as global mar­kets have equal­ized fol­low­ing the volatil­ity of the 2008 down­turn, when gold's value spiked.

AP PHOTO

This July 9 photo shows a Wall Street sign near the New York Stock Ex­change in New York. U.S. stocks were mostly lower in early trad­ing Tues­day fol­low­ing weak cor­po­rate earn­ings re­sults from IBM, United Tech­nolo­gies and other big com­pa­nies.

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