The Toronto stock market continued to shed gains Wednesday January 17 morning with weakness led by the metals and mining sector.
New York indexes were flat on mixed economic data and a disappointing earnings report from computer chip giant Intel Corp Toronto’s S&P/TSX composite index moved down 9.38 points to 12,710.94, edging up from earlier lows as oil-price declines moderated.
The Canadian dollar was ahead 0.22 of a cent to 85.20 cents US after tumbling almost three-quarters of a cent Tuesday, while the TSX Venture Exchange eased 17.06 points to 2,848.179.
The TSX metals and mining sector gave back 1.15%. The March copper contract on the New York Mercantile Exchange was off three cents to US$2.54 a pound. HudBay Minerals Inc. (TSX:HBM) was down 27 cents to US$21.24.
But shares in Blue Pearl Mining Ltd (TSX:BLE) gained 31 cents to US$8.55 as the firm said it expects to produce 21 million pounds of molybdenum this year, rising to 27 million in 2008 and 29 million in 2009.
Mining and energy stocks have been largely responsible for a dull start to the trading year in Toronto as metals and crude prices have fallen.
But analysts note that the market was due for a correction, particularly in a sector such as mining that shot up 66% last year.
“We’ve had a hell of a bull market, running four-years,” said Joe Ismail, technical analyst at Maison Placements Canada.
“We see some group rotation here… and I’ve advised clients to go defensive for the beginning of ’07, and the defensive area I’ve been looking at is the consumer staples and discretionary sectors.”
Both those sectors hit all-time highs this week.
On Wall Street, the Dow Jones industrials slipped 6.49 points to 12,576.10.
The Nasdaq was off 4.86 points to 2,492.92 after Intel’s fourth-quarter profit plunged 39% as a result of a price war with rival Advanced Micro Devices Inc. and massive restructuring.
Intel said its net income was US$1.5 billion, or 26 cents per share, versUS$2.45 billion, or 40 cents per share, in the same period a year ago. Intel shares fell US$1.14 to US$21.16.
The S&P 500 index edged 0.48 point higher to 1,432.38.
The US Labour Department said its producer price index rose 0.9% in December, easing sharply from a two% jump in November but well above the 0.5% reading economists had expected. This increased concerns that the Federal Reserve might resume its rate-hiking campaign to curb inflation.
The US Federal Reserve, meanwhile, reported that industrial production rebounded with a 0.4% increase in December, much better than the expected 0.1% rise.
On the Toronto market, frozen dessert maker CoolBrands International (TSX:COB.A) is reported to be in talks to sell many of its remaining assets to Dreyer’s Grand Ice Cream Inc., a unit of Nestle SA.
The newest transaction could spell the end of the maker of the famous Eskimo Pie ice cream bars, which was once North America’s third-largest ice cream company. Its shares gained seven cents to US$1.10.
The TSX information technology sector was down 0.75%.
Shares in Cognos Inc. (TSX:CSN) were 29 cents lower at US$51.33 after the business software firm acquired privately held Celequest Corp of Redwood City, Calif., for an undisclosed price.
Research In Motion (TSX:RIM) dropped US$4.37 to US$145.64 as investors continued to react to falling prices for BlackBerrys.
The TSX energy sector was flat as oil prices bounced off the lows of the morning. The February contract for light sweet crude on the New York Mercantile Exchange fell two cents to US$51.19 a barrel after plunging US$1.78 on Tuesday and dropping under US$51 Wednesday January 17 morning.
Shares in Talisman Energy Inc. (TSX:TLM) were five cents ahead to US$18.35 after the company reported “significant oil rates” at the Hai Su Trang exploration well off Vietnam.
The gold sector gained 0.65% as the February bullion contract on the Nymex rose US$4.50 to US$630.40 an ounce.
Shares in Angiotech Pharmaceuticals Inc. (TSX:ANP) climbed 61 cents to US$10.72 after the company won a patent case in a Dutch court against Conor Medsystems Inc. Angiotech said the court found that Conor’s CoStar paclitaxel stent infringes an Angiotech European patent, although appeals are likely.
Cogeco Cable Inc. (TSX:CCA) shares slipped 18 cents to US$39.92 after the firm said it is issuing 4.5 million subordinate voting shares at US$38.50 each for a total of US$173.25 million.
Whiterock Real Estate Investment Trust (TSX:WRK.UN), which has office, industrial and retail properties in Central and Eastern Canada, is looking for a buyer, and its units rose 70 cents to US$14.79 on the news.
Overseas, London’s FTSE 100 index was down 17.5 points to 6,198.2.
Frankfurt’s DAX 30 declined 32.76 to 6,684.06 while the Paris CAC 40 fell 32.46 to 5,559.08.
Tokyo’s Nikkei 225 index was up 58.89 at 17,261.35 as investors awaited the outcome of a two-day policy meeting of Japan’s central bank.
In Hong Kong, the Hang Seng index rose 36.62 points to 20,064.57.