TORONTO (Reuters) - Early gains on the Toronto Stock Exchange fizzled out on Wednesday, leaving the main index lower as weak energy and tech issues undercut the morning’s optimism over strong company earnings.
After rising more than 100 points shortly after the open, the index tumbled as worries over the prospect of a U.S. recession again took hold.
Sliding oil prices set the tone for the heavyweight energy sector, which fell 1.4 percent, as crude stumbled amid an unexpectedly big rise in U.S. petroleum stockpiles.
Petro-Canada PCA.TO dropped C$1.45, or 3.3 percent, to C$43.12.
The tech sector was down 3.4 percent, with BlackBerry maker Research In Motion RIM.TO falling C$4.32, or 4.9 percent, to C$84.60.
“Certainly this fear of a recession in the United States is still front and center in investors’ minds,” said Elvis Picardo, investment strategist at Northern Securities Inc.
“Some of the earnings were fairly strong but I think investors at this point are still quite concerned about what lies ahead,” said Picardo. “Perhaps the feeling is that the earnings outlook for many companies is not going to be as robust as was the expectation even three months ago.”
The S&P/TSX composite index .GSPTSE closed down 64.75 points, or 0.5 percent, at 12,867.20 with half of its 10 main groups in negative territory.
The financial sector also added to its losses, falling 0.4 percent, with Canadian Imperial Bank of Commerce (CM.TO) down C$1.67, or 2.4 percent, at C$68.33, and Bank of Montreal (BMO.TO) off 55 Canadian cents, or 1 percent, to C$56.15.
On the upside, BCE Inc (BCE.TO) rose after the company, which is in line to be taken private in a C$34.8 billion buyout, reported its fourth-quarter profit was boosted by gains at its wireless business.
Shares of BCE, Canada’s largest telecoms company, rose 35 Canadian cents, or 1 percent, to C$34.90. The stock has been battered recently by fears that the buyout could be delayed, repriced or simply called off, but its strong earnings helped ease those concerns.
The materials sector which had helped lift the Toronto benchmark in the morning, edged down 0.03 percent, stung by profit-taking. But the subindex of gold producers gained 1.3 percent as the price of bullion rallied.
Goldcorp (G.TO) was up 65 Canadian cents, or 1.9 percent, at C$35.53. Iamgold Corp (IMG.TO) added 13 Canadian cents, or 1.7 percent, to C$7.71 after it said it will spend $18.4 million to expand the mill at its Rosebel mine, thereby upping life-of-mine production.
The consumer staples sector rose 1.7 percent, helped by Saputo Inc (SAP.TO) after it reported a higher profit on a one-time tax recovery and 25 percent increase in revenue. Saputo, one of North America’s biggest cheese makers, was up 83 Canadian cents, or 3.1 percent, at C$27.69.
It was the third straight day of declines for the index, which has been plagued by concerns of a recession in the United States, Canada’s biggest trading partner. Worries of what a slowdown could do to the demand for resources has also hurt the commodities-heavy index.
Market volume was 364 million shares worth C$6.1 billion. Decliners outpaced advancers 813 to 730. The blue chip S&P/TSX 60 index .TSE60 closed down 4.41 points, or 0.58 percent, at 752.36.
In New York, stocks also saw their third day of losses, after U.S. Federal Reserve officials dampened hopes of further interest rate cuts.
The Dow Jones industrial average .DJI was down 65.03 points, or 0.53 percent, at 12,200.10, while the Nasdaq composite index .IXIC fell 30.82 points, or 1.33 percent, to 2,278.75.
Editing by Rob Wilson