Toronto stock market pulls back, weighed down by energy, mining and financials
TORONTO - The Toronto stock market ended Tuesday lower, with most sectors down amid speculation that Canada's biggest exchange is due for a broad sell-off.
The S&P/TSX composite index fell 35.75 points to 15,137.18, dragged lower by energy, mining and financial stocks. By the end of the day, there was weakness across most of the sectors, although the gold sector glittered, gaining nearly one and a half per cent.
The TSX telecom sector remained a weight a day after Ottawa announced it will be setting aside the majority of spectrum in a new wireless auction for newer, smaller entrants in Canada's cellphone industry. Telus Corp. (TSX:T) lost two per cent, or 81 cents, to $38.47; while shares in Rogers Communications (TSX:RCI.B) dipped 0.38 per cent, or 16 cents, to $42.20, and BCE Inc. (TSX:BCE) faded 0.60 per cent, or 29 cents, to $47.92.
Craig Jerusalim, a portfolio manager at CIBC, said investors shouldn't be too worried about the decline because the long-term outlook remains positive.
"There's a little profit-taking going on," he said. "But if you look at the valuation of the TSX, it is slightly above the longer-term average and it'll stay above that average line. The fundamentals are supportive of that and I wouldn't get too concerned about the technical pullback."
Jerusalim said these fundamentals â€” including low interest rates, high oil prices, strong housing figures and good earnings â€” have helped push the Toronto Stock Exchange up more than 10 per cent year-to-date.
The loonie was unchanged at 93.66 cents US.
U.S. markets were also lower with the Dow Jones industrials losing 117.59 points to 16,906.62, the Nasdaq dropping 60.07 points to 4,391.46 and the S&P 500 down 13.94 points at 1,963.71. Last week the indexes rallied to new highs following a stronger than expected U.S. jobs report for June.
A report released Tuesday reinforced the apparent strength of the U.S. job market, showing that U.S. employers advertised more jobs in May than in any month in the past seven years. The U.S. Labor Department says employers posted 4.64 million jobs, a 3.8 per cent increase from April's total of 4.46 million. That's the fourth straight strong gain and is the highest number since June 2007.
As companies begin to report their second-quarter earnings this week, traders will be eager to see if results justify the strong performance of the equity markets so far this year.
U.S. aluminium giant, Alcoa (NYSE:AA) reported after markets closed that it had a profit of $138 million, or 12 cents a share, compared with a year-earlier loss of $119 million, or 11 cents a share. Ex-items, its earnings came in at 18 cents â€” beating analyst expectations of 12 cents per share. Alcoa is viewed as an economic bellwether because its aluminum products are widely used in various sectors like manufacturing, defence and the auto industry.
Alco shares closed up 11 cents at US$14.85 on Tuesday, then rose a further 23 cents to US$15.08 in early after-hours trading.
On the commodity markets, the August crude contract fell 13 cents to US$103.40 a barrel as concerns about possible supply disruptions continued to lessen. Oil hit a 10-month closing high in June amid concerns that insurgents in Iraq might push into important oil-producing regions and choke off supplies from that country. That threat has since faded.
September copper was unchanged at US$3.26 a pound and August gold bullion lost 50 cents to US$1,316.50 an ounce.
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