Canadian stocks pared a three-day gain to settle lower Wednesday, pressured by sell-offs in commodities, even as traders weighed the U.S. Federal Reserve move to leave its interest rate unchanged and extend the Operation Twist bond swapping program citing a slowdown in jobs. Nevertheless, there was little hint of any further monetary stimulus in the offing.
Toronto's main index, the S&P/TSX, closed Wednesday at 11,759.34, down 29.02 points or 0.25 percent. The S&P/TSX Composite Index touched an intraday high of 11,824.61 and a low of 11,681.23.
The TSX Venture Index closed at 1,254.57, down 9.81 points or 0.78 percent. The index opened at 1,261.00 compared to its previous close of 1,264.38.
Almost all major components of the S&P/TSX Index were in in the red, led mostly by resource stocks.
The Diversified Metals & Materials Index plunged 2.60 percent, with Inmet Mining (IMN.TO) losing 4.83 percent, First Quantum Minerals (FM.TO) down 2.92 percent, and Teck Resources (TCK.B.TO) losing 2.01 percent each.
An EIA report showed U.S. crude oil inventories moved up 2.90 million barrels and gasoline stocks added 0.90 million barrels in the weekended June 15. Analysts were expecting crude oil inventories to decline by 600,000 barrels last week.
Oil prices plunged to its lowest since early October following the release of the EIA report. U.S. crude oil futures for July delivery shed $2.23 or 2.7 percent to close at $81.80 a barrel Wednesday on the NYMEX.
The Energy Index slid 1.29 percent with Suncor Energy Inc. (SU.TO) shedding 1.69 percent, Canadian Natural Resources Limited (CNQ.TO) down 1.94 percent, and Encana Corporation (ECA.TO) down 2.85 percent. Talisman Energy Inc. (TLM.TO) was down 0.94 percent.
Gold futures for August delivery dropped $7.40 or 0.5 percent to close at $1,615.80 an ounce Wednesday on the NYMEX. The Global Gold Index slipped 0.81 percent.
Among gold stocks, Kinross Gold Corp. (K.TO) dropped 2.78 percent, while Barrick Gold Corp. (ABX.TO) was marginally up 0.07 percent. Eldorado Gold Corp. (ELD.TO) gained 0.23 percent, while Goldcorp. (G.TO) surrendered 1.32 percent.
The Materials Index dropped 1.05 percent with Potash Corporation of Saskatchewan Inc. (POT.TO) shedding 0.34 percent.
The Financial Index was up at 0.44 percent with Royal Bank of Canada gaining 0.26 percent, Bank of Nova Scotia (BNS.TO) up 0.38 percent, and Manulife Financial Corp. (MFC.TO) down 0.36 percent.
Transportation systems maker Bombardier Inc. (BBD.A.TO) slipped 0.49 percent.
Smartphone maker Research In Motion Limited (RIM.TO) plunged 4.29 percent amid reports of job cuts to trim operating expenses by $1 billion.
Alimentation Couche-Tard Inc. (ATD.A.TO) shares gained 3.47 percent after the company said it has succeeded in the $2.7-billion acquisition of Norway's Statoil Fuel & Retail ASA, with almost 91 percent of Statoil Retail's shares tendered to the offer. This is above the 90 percent mark that Alimentation Couche-Tard indicated for a compulsory acquisition of the balance shares in the company.
Oil and gas industry drilling services provider Pason Systems Inc. (PSI.TO) was up 0.20 percent after announcing it would pay $19.4 million in total damages in the US Auto-Driller Lawsuit
Energy infrastructure business AltaGas Ltd. (ALA.TO) edged up 0.74 percent after revealing an agreement with Quatro Resources Inc. to acquire its Midstream Assets for about $20 million.
Faced with a fragile economic recovery that may be losing steam, the U.S. Federal Reserve on Wednesday extended its Operation Twist bond swapping program. In an effort to thaw credit markets and keep real interest rates low, the Fed will continue to sell billions in short-term bonds and use the funds to buy longer-term securities investments through 2012.
The central bank kept its benchmark interest rate at effectively zero, and reiterated that economic slack will probably warrant "exceptionally low" interest rates through at least late 2014.
In economic news from the eurozone, Germany's producer price inflation slowed more than expected to 2.1 percent in May, Destatis said. Economists expected the inflation to ease to 2.2 percent from 2.4 percent in April.
From the U.K., policymakers of the Bank of England decided to retain the size of quantitative easing unchanged in a split vote, minutes of the meeting showed. Four members of the Monetary Policy Committee sought more stimulus, while five members voted to maintain the QE intact at GBP 325 billion.
by RTT Staff Writer
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