Sunday, March 1st0.3°C
25327
25263

Toronto stock market negative amid new round of economic concerns

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 0.17 of a cent at 92.11 cents US.

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

The Dow Jones industrials climbed 44.5 points to 16,491.31, while the Nasdaq gained 21.3 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 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 per cent Friday afternoon, after starting the week at 2.66 per cent and going as low as 2.47 per cent 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 Scotia Private Client Group.

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.

"So you add into that it's been a long great recovery, and so you hit a key level like 1,900 on the S&P (hit briefly on Wednesday), and some asset allocation models kick in and people start buying bonds and selling equities."

Mills thinks this situation portends a market that is likely in for a good deal of sideways action along with a fair bit of volatility as traders look for direction.

In earnings news, private equity firm Onex Corp. (TSX:OCX) reported quarterly consolidated net profit of $99 million, up from a net loss of $271 million a year ago. Revenues were up three per cent to $6.5 billion. Onex says it’s increasing its quarterly dividend 33 per cent to five cents and its shares declined 88 cents to $62.47.

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

The gold sector faded about 1.1 per cent as June bullion edged 20 cents lower to US$1,293.40 an ounce.

June crude gained 52 cents to US$102.02 a barrel and the energy sector dropped almost one per cent.

The base metals sector was down 0.67 per cent, while July copper was unchanged at US$3.15 a pound.

There was also major merger and acquisition activity Friday morning as restaurant chain Red Lobster is to be sold to investment firm Golden Gate Capital for US$2.1 billion.

For the week, the TSX drifted 0.13 per cent lower while the Dow industrials lost 0.6 per cent.

The Canadian Press


Read more Business News

24357


Recent Trending




Today's Market
S&P TSX15234.34-6.82
S&P CDNX706.73+5.80
DJIA18132.70-81.72
Nasdaq4963.528-24.362
S&P 5002104.50-6.24
CDN Dollar0.79960.00
Gold1203.00+6.10
Oil52.14+1.53
Lumber297.20+1.20
Natural Gas2.895-0.007

 
Okanagan Companies
Pacific Safety0.12+0.005
Knighthawk0.010.00
QHR Technologies Inc1.55-0.03
Cantex0.035-0.005
Anavex Life Sciences0.190.00
Metalex Ventures0.035-0.005
Russel Metals25.38+0.08
Copper Mountain Mining1.30+0.04
Colorado Resources0.15+0.015
ReliaBrand Inc0.008-0.0007
Sunrise Resources Ltd0.05+0.015
Mission Ready Services0.235+0.025

 



24696

FEATURED Property
21981472680 Arthur Road
4 bedrooms 3 baths
$825,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Creating your retirement vision

A vision means different things to different people. To the head of a large corporation, it’s the ability to chart a course that will deliver success (think Steve Jobs and Apple), to a shaman, i...


Are you asking the right questions?

Have you ever had this happen to you? You are in the middle of your second or third good discussion with a prospect and everything seems to be going great. The prospect seems engaged and happy to work...


It's OK to say 'I'm sorry'

Photo: ContributedStand-up comedians and sitcoms have been making fun of Canadians for being polite as long as I can remember. Being known for our niceness is certainly not a bad thing and I wish more...

_








Member of BC Press Council


24681