TSX TAKES A HIT FROM FALLING GOLD PRICES
TORONTO • A steep decline in gold prices left a dent in the Toronto stock market on Wednesday as a majority of other sectors also declined.
The S&P/TSX composite index pulled back 41.67 points to close at 15,304.77, with declining gold stocks providing the biggest drag on the overall market.
The Canadian dollar was up 0.35 of a U.S. cent at 81.78 cents.
The TSX gold dropped 3.7 per cent as recent positive U.S. economic data and some better than expected financial results added pressure to a commodity that tends to flourish during equity market declines.
June bullion lost $16.00 to settle at US$1,186.90 an ounce, while copper dropped four cents to $2.67.
Barrick Gold was down four per cent, or 63 cents, at $15.13, while rival Goldcorp slumped 55 cents or just over three per cent to $23.07.
TSX energy stocks rose 0.2 per cent overall, while the June crude contract slid 45 cents to US$56.16 a barrel.
The telecommunications sector jumped 1.1 per cent with all of the major Canadian telecommunications providers seeing a pop in their stock price.
Shares of Rogers Communications were the biggest gainer, rising 2.2 per cent as the Toronto-based company delivered mixed quarterly results earlier in the week.
The TSX has advanced only once in the past five trading sessions, though its day-to-day declines have been relatively tame.
Wall Street headed in a different direction even as traders remained fixated on generally lacklustre corporate earnings that have often disappointed on revenue, raising concerns about the strength of the U.S. economic recovery.
The Dow Jones industrial average rose 88.68 points to 18,038.27. The Nasdaq advanced 21.07 points to 5,035.17 and the S&P 500 gained 10.67 points to 2,107.96.
While some big U.S. companies have beat expectations, several heavyweight tech names haven’t yet reported, like Microsoft and Apple, said Ian Nakamoto, director of research at 3MACS.
“We’re right in the middle of earnings season, (and) the blue chip companies will set a tone for the overall market,” he said.
“The expectations are so low in terms of earnings that I think it’s relatively easy to beat now.”
Several U.S. restaurant chains delivered a mixed combo of financial results, with both McDonald’s and Yum Brands coming in ahead of analyst forecasts, while Chipotle Mexican Grill faced some setbacks. The burrito and taco maker said a shortage of pork and bad weather affected what has until now been a sharp growth in sales.
McDonald’s faced restructuring costs and lower quarterly sales, but still managed to deliver better results than expected amid its turnaround efforts.
Yum Brands reported that sales at both Taco Bell and KFC restaurants grew, though its profits were squeezed partly on a tumble in sales in China where it has been struggling to recover from a foodsupply scare last summer.