Warmer weather hits energy stocks, dragging down TSX

Murky retail news hurts U.S. markets Dividend- yielding blue chips aid T. O.

North American markets stalled yesterday as flagging energy stocks pressured Toronto and gains in financials faded.

In New York, indexes retreated as a mixed picture on the weekend’s shopping frenzy left investors wondering about holiday sales. “ Certainly we’re doing a bit better than our cousins to the south in terms of the market,” said David Wolf, head of Canadian economics and strategy at Merrill Lynch Canada.

“ Canada is in quite good shape both economically and fiscally, which allows the government to provide that kind of support to financial markets and to the economy as a whole in a way that we’re not getting elsewhere.”

Toronto’s S& P/ TSX composite index was down 63.36 points to 10,939.21 after a positive start as investors tried to maintain momentum after Ottawa cut dividend taxes and signalled it would leave income trusts alone last week. The TSX Venture Exchange shrank 14.56 points to 2,050.11. The Canadian dollar was up 0.11 cent to 85.62 cents ( U. S.). The Dow Jones industrials declined 40.9 points to 10,890.72 after six straight sessions of gains. The Nasdaq composite index declined 23.64 to 2,239.37 while the S&P 500 fell 10.79 points to 1,257.46. Wall Street’s picture was murky as U. S. investor attention focused on the holiday retail season that kicked off Friday. The U. S. National Retail Federation said a survey of consumers pointed to a 21.9 per cent increase in weekend spending over last year. But other reports said retail traffic dipped heavily once Friday’s bargains expired. A clearer picture will emerge Thursday, when retailers report sales for all of November.

“ I don’t think that we got as much in terms of aggressive reports really in either direction as people had been expecting,” said Wolf. “ We didn’t get much in the way of sales were off the charts or sales were terrible; kind of like, it’s okay.”

Sentiment on the U. S. economy worsened as the U. S. National Association of Realtors reported sales of existing homes declined 2.7 per cent last month. The price of oil fell as fears of a spike in demand were eased by forecasts of warmer weather in the northeastern U. S., the world’s largest heating- oil market. The January contract for light sweet crude on the New York Mercantile Exchange fell $ 1.35 to $ 57.36 ( U. S.) a barrel. West Texas Intermediate closed at $57.37 (U.S.), down $ 1.10. The TSX energy sector was down 2.35 per cent as EnCana Corp. lost $ 1.59 to $ 52.21.

Dividend- yielding blue chips lent support to the TSX as Canadian National Railway ran up $ 1.57 to $ 93.32, Scotiabank rose 37 cents to $ 47.37 while Manulife Financial Corp. climbed 62 cents to $ 67.32. The gold sector was off 0.4 per cent as spot gold rose $ 6.20 to $ 498.30 ( U. S.) an ounce. And shares in Atna Resources Ltd. soared to 74 cents, or 73.25 per cent, to $ 1.75 after the company reported drilling results from its Ogee zone in Nevada “ suggests potential for a significant new discovery.” On the TSX, declines beat advances 865 to 655 with 207 unchanged.

Toronto market volume was 289.5 million shares worth $ 5.58 billion.