Canadian stocks ended lower for a third straight day Wednesday, led mostly by mining and financial issues, after the U.S. Federal Reserve disappointed with no quantitative easing forthcoming this time around. Investor sentiments were also impacted by some soft macroeconomic data from the U.S., Europe, and China.
The Federal Reserve while making a sober assessment of the U.S economy Wednesday, refrained from any new stimulus measures in their latest decision on monetary policy. In a sign that policy makers are concerned with the pace of the recovery, Federal Open Market Committee members repeated their promise to keep interest rates at zero until late 2014.
The S&P/TSX Composite Index closed Wednesday at 11,618.53, down 46.18 points or 0.40 percent. The The Index touched an intraday high of 11,690.86 and a low of 11,600.94.
The Metals & Mining Index declined 1.43 percent with Lundin Mining Corp. (LUN.TO) dropping 0.23 percent and Teck Resources Limited (TCK.B.TO) shedding 1.35 percent. Baja Mining Corp. (BAJ.TO) plunged 45.45 percent, while First Quantum Minerals Ltd. (FM.TO) dropped 1.54 percent.
The Financial Index was down 0.72 percent with Toronto-Dominion Bank (TD.TO) down 0.29 percent and Royal Bank of Canada (RY.TO) down 0.54 percent. Bank of Nova Scotia (BNS.TO) fell 0.71 percent, while Manulife Financial Corporation (MFC.TO) slipped 2.60 percent.
Today's data from the EIA revealed that U.S. crude oil dived 6.50 million barrels and gasoline stocks shed 2.20 million barrels in the weekended July 27. Crude for September added $0.62 to $88.68 a barrel.
The Energy Index gained 0.43 percent with U.S. crude oil futures for September delivery gaining $0.85 or 1 percent to close at $88.91 a barrel Wednesday on the NYMEX.
Talisman Energy Inc. (TLM.TO) gained 7.34 percent despite posting a significantly lower second quarter net income of $196 million or $0.14 per share versus $698 million or $0.50 per share last year. Earnings from operations were $71 million or $0.07 per share, down from $168 million or $0.16 per share in the prior-year quarter. Analysts expected earnings of $0.10 per share
Among other energy stocks, Encana Corp. (ECA.TO) gathered 0.45 percent, while Suncor Energy Inc. (SU.TO) moved up 0.36 percent. Progress Energy Resources Corp. (PRQ.TO) edged down 0.70 percent.
The Global Gold Index fell 0.87 percent, with gold futures for August delivery shedding $7.3 or 0.5 percent to close at $1,607.30 an ounce Wednesday on the NYMEX. The Capped Materials Index dropped 1.11 percent.
Among gold stocks, Yamana Gold Inc. (YRI.TO) shed 0.61 percent, Kinross Gold Corp. (K.TO) dropped 4.42 percent, and Barrick Gold Corp. (ABX.TO) edged down 1.00 percent.
Fertilizer maker Potash Corporation of Saskatchewan Inc. (POT.TO) dropped 1.089 percent.
Transportation systems maker Bombardier Inc. (BBD.B.TO) ended 0.28 percent lower, while Blackberry maker Research In Motion Limited (RIM.TO) also dropped 0.28 percent.
Media company Torstar Corp. (TS_B.TO) dived 5.49 percent after reporting a drop in second-quarter net income to C$35.7 million or C$0.44 per share. The company declared a quarterly dividend of 13.125 cents per share.
Airlines operator WestJet Airline Ltd. (WJA.TO) shed 3.56 percent even after reporting improved second-quarter net earnings of C$42.5 million or C$0.31 per share compared to C$25.6 million or C$0.18 per share in the 2011 second quarter. Analysts were expecting the company to report earnings of C$0.33 per share.
Food and beverages company Maple Leaf Foods Inc. (MFI.TO) gained 7.20 percent after posting improved second-quarter net income of C$29.85 million or C$0.21 per share, with adjusted earnings of C$0.28 per share. Analysts expected earnings of C$0.23 per share for the quarter.
Specialty bakery products company Canada Bread Co Ltd. (CBY.TO) net earnings for the second quarter of 2012 soared to C$26.8 million or C$1.05 per share, from C$14.9 million or C$0.59 per share in the prior-year quarter. Quarterly adjusted earnings per share were C$1.09, higher than last year's C$0.97. The stock edged up 1.53 percent.
In economic news from the U.S., ADP said that the private sector added 163,000 jobs in July following a downwardly revised increase of 172,000 jobs in June. Economists had expected an increase of about 120,000 jobs compared to the increase of 176,000 jobs originally reported for the previous month.
A report from the Institute for Supply Management showed a modest increase in its index of U.S. manufacturing activity, but the rise was less than expected and continued to point to a contraction in the sector. The ISM's purchasing managers index inched up to 49.8 in July from 49.7 in June, although a reading below 50 indicates contraction in manufacturing activity. Economists expected the index to climb to a reading of 50.2. With the index below 50, it is the second month of contraction in manufacturing activity since July 2009.
The eurozone manufacturing sector continued to contract, data from Markit Economics showed. The manufacturing Purchasing Managers' Index fell more than initially estimated to 44 in July, a 37-month low, from 45.1 in June. The flash estimate for July was 44.1.
Germany's manufacturing sector contracted more than initially estimated in July, and the rate of fall accelerated from the previous month, data from Markit Economics and BME showed. The seasonally adjusted purchasing managers' index for the manufacturing sector dropped to 43 in July from 45 in June, and hit the lowest level since June 2009.
Data out of China earlier today revealed China's official factory purchasing managers' index fell to an eight-month low of 50.1 in July, indicating sluggish growth in the sector, while a survey results from HSBC indicated the more market-sensitive private sector is starting to recover. The HSBC PMI rose to a seasonally adjusted 49.3, its highest level since February and little changed from a flash estimate of 49.5.
by RTT Staff Writer
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