TSX SLIPS ON LATEST ROUND OF WORRIES

TORONTO • Resource and financial companies were the main culprits behind a lower session on the Toronto stock market Friday as traders wondered if economic conditions warranted further moves up for stocks.

The S&P/TSX composite index closed down 74.15 points at 14,514.74.

The Canadian dollar was ahead US0.17¢ at US92.11¢.

U.S. indexes registered gains amid a disappointing read on consumer confidence but a strong showing for housing starts.

The Dow Jones industrial average climbed 44.5 points to 16,491.31, while Nasdaq gained 21.30 points to 4,090.59 and the S&P 500 index rose 7.01 points to 1,877.86.

Markets finished in negative territory overall for the week after data showed the economic recovery in Europe is more fragile than thought, while retail giant and economic barometer Wal-Mart Stores Inc. delivered a disappointing outlook for the second quarter.

Meanwhile, the University of Michigan’s latest consumer sentiment index also offered a glum reading. The index registered 81.8 for this month, well below the 85 level that had been expected.

However, U.S. housing starts for April came in at an annualized pace of 1.072 million units, higher than the 980,000 that economists had expected.

This has also been a remarkable week in the fixed-income area where bond yields have fallen sharply amid equity market nervousness.

The benchmark U.S. 10-year Treasury bond was at 2.52% Friday afternoon, after starting the week at 2.66 % and going as low as 2.47% on Thursday.

“I think that has got more focus than anything and justifiably because people are worried that [lower yields are] anticipating a recession,” said Wes Mills, chief investment officer at Scotia Private Client Group.

Mr. Mills notes the move started out of Europe earlier this week as a flight to safety targeted U.S. Treasuries. Yields on those bonds are about 1.2 percentage points higher than German 10-year bonds. On top of that, investors think that stocks in North America are largely fairly valued right now and economic conditions don’t warrant significant moves higher, conditions which make bonds attractive.

In earnings news, private-equity firm Onex Corp. reported quarterly consolidated net profit of $99-million, up from a net loss of $271-million a year ago. Revenues were up 3% to $6.5-billion. Onex says it’s increasing its quarterly dividend 33% to 5¢ and its shares declined 88¢ to $62.47.

The financials sector was the biggest weight on the TSX, down 0.75% ahead of the release of quarterly earnings by the big banks starting next week.

The gold sector faded about 1.1% as June bullion edged US20¢ lower to US$1,293.30 an ounce. The base metals sector was down 0.67%, while July copper was unchanged at US$3.15 a pound.

June crude gained US52¢ to US$102.02 a barrel and the energy sector dropped almost 1%.

For the week, the TSX drifted 0.13% lower while the Dow lost 0.6%.