TSX TAKES DIP ON MATERIALS, ENERGY
TORONTO • Several disappointing U.S. earnings reports pulled North American stock markets lower on Tuesday, while investors sold off materials and energy stocks.
The S&P/TSX composite index lost 11.46 points to 12,516.89, closing out a tightly-traded session ahead of comments from both Canada’s central bank and the U.S. Federal Reserve on Wednesday.
The Canadian dollar was up 0.45 of a cent to US96.47¢ US before the Bank of Canada issues its first policy decision under new governor Stephen Poloz, scheduled for 10 a.m. ET on Wednesday.
On the TSX, materials stocks dropped 2.2%, as Agrium fell $2.42 to $93.16.
The energy sector closed 0.3% lower with the August crude contract on the New York Mercantile Exchange weakening 32¢ to US$106 a barrel.
Gold stocks were some of the biggest gainers as August bullion rose $6.90 to US$1,290.40 an ounce while the TSX gold sector rose 3.1%. The September copper contract on the Nymex gained 4.2¢ to US$3.187 a pound.
In the U.S., investors still had plenty to digest as both Coca-Cola, the world’s largest beverage maker, and retail brokerage Charles Schwab, delivered second-quarter results that disappointed analysts.
Coca-Cola reported declining profits and weak volume growth for the quarter. Charles Schwab said its profits fell 7% to $256-million, or 18¢ per share, in the second quarter, from $275-million, or 20¢ per share, a year earlier.
On Wall Street, the Dow and S&P moved back after closing at record highs for three consecutive sessions. The Dow shifted back 32.41 points to 15,451.85, the Nasdaq composite index was 8.99 points lower to 3,598.50 while the S&P 500 index slid 6.24 points to 1,676.26.
North American markets were holding back from any major shifts before the testimony from U.S. Federal Reserve chairman Ben Bernanke on Wednesday that could set the tone for the rest of the summer.
Disappointing retail sales figures on Monday reinforced expectations that the so-called “tapering” may take place later in the year than previously thought.
Shares of Loblaw Cos. Ltd. pulled back a day after the company announced it planned to buy Shoppers Drug Mart Corp. for $12.4-billion in cash and stock — a deal that has sparked a review by two ratings agencies.
Standard & Poor’s is placing the companies on CreditWatch “with negative implications,” which means it may lower or affirm the ratings within the next three months.
DBRS also placed Shoppers Drug Mart under review with negative implications, reflecting Loblaw’s “potential assumption of approximately $1-billion of Shoppers’ debt.”
Loblaw stock dipped $1.53 to $48.60, while Shoppers moved down 43¢ to $59.69.
In other news, Sun Media Corp. announced plans Tuesday to cut 360 jobs and close 11 publications across the country, including its 24 Hours free daily newspapers in Ottawa, Calgary and Edmonton. The media company’s parent, Montreal-based Quebecor Inc., saw its shares fall 23¢ to $47.50.