Commodity stocks knock TSX from record high perch;NY lower despite sales data

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(The Canadian Press)

By Malcolm Morrison, The Canadian Press

TORONTO - Weakness in energy and metals stocks sent the Toronto stock market lower late Tuesday morning, just a day after the TSX beat its old closing high from July of last year.

New York markets were also lower despite April retail sales which came in better than expected, as Wal-Mart Stores delivered a glum outlook.

Investors also took in a major deal that will see American personal computer and printer maker Hewlett-Packard Co. acquire Electronic Data Systems Corp. in a deal that the companies value at US$13.9 billion.

Toronto's S&P/TSX composite index moved 82.05 points lower to 14,584.02.

Monday's showing pushed the TSX about 40 points past the previous high. But the rally has been based on energy and base metals stocks, along with strong gains by individual companies such as Research In Motion Ltd. (TSX: RIM.TO) and Potash Corp. (TSX: POT.TO).

The TSX Venture Exchange was off 27.33 points to 2,548.78 while the Canadian dollar moved up 0.13 cent to 99.69 cents US.

New York's Dow Jones industrials slipped 67.9 points to 12,808.41.

The Nasdaq composite index was down 13.07 points to 2,475.42 while the S&P 500 index dipped 4.22 points to 1,399.36.

The U.S. Commerce Department reported retail sales dipped 0.2 per cent last month, in line with expectations. But excluding autos, retail sales rose 0.5 per cent, a better performance than expected.

Wal-Mart Stores Inc. reported a 6.9 per cent rise in first-quarter profit to US$3.02 billion, as revenue increased 10.3 per cent to $95.3 billion. However, the world's largest retailer said same-store sales in the United States were up only 2.9 per cent from a year earlier, and in the current quarter are expected to rise by between nothing and two per cent. Wal-Mart shares were down $1.03 to US$56.99.

Investors seemed little moved by comments from U.S. Federal Reserve chairman Ben Bernanke, who said turmoil in financial markets has eased but the situation is still "far from normal."

The TSX energy sector slipped almost one per cent while oil prices advanced. The June crude contract on the New York Mercantile Exchange climbed $1.12 to US$125.35 a barrel but EnCana Corp. (TSX: ECA.TO) fell 99 cents to $91.21 and PetroCanada (TSX: PCA.TO) lost 72 cents to $55.98.

Gold prices were lower on a strengthening greenback with the June bullion contract in New York down $16.40 to US$868.50 an ounce. The TSX gold sector fell 1.25 per cent as Kinross Gold Corp. (TSX: K.TO) moved down 18 cents to $19.59 and Goldcorp (TSX: G.TO) retreated 83 cents to $38.83.

Iamgold Corp. (TSX: IMG.TO) shares were 14 cents higher to $6.19 after first-quarter earnings almost tripled to US$34.4 million on high gold prices and asset sales.

The base metals sector was also weak as Teck Cominco Ltd. (TSX: TCK-B.TO) declined 66 cents to $47.33 while Sherritt International (TSX: S.TO) gave back 40 cents to $15.20.

Uranium miner Cameco Corp. (TSX: CCO.TO) reported first-quarter earnings of $133 million, up 125 per cent from a year ago as revenue increased 45 per cent to $593 million on higher uranium prices and volumes. Its shares were down 38 cents to $39.90.

Rona Inc. (TSX: RON.TO) reported a 5.2 per cent decline in same-store sales in the first quarter and net earnings at the largest Canadian retailer of hardware and renovation products declined to $1 million, compared with $9 million a year ago. Its shares were knocked down 49 cents to $12.96.

DundeeWealth Inc. (TSX: DW.TO) suffered a $49.7-million first-quarter net loss after another steep writedown of asset-backed commercial paper. Revenue was $211.3 million in the January-March period, off from $226.9 million a year earlier, and DundeeWealth took a $75.9-million ABCP writedown, on top of $95.2 million written down last year. Its shares dipped 15 cents to $13.59.

Overseas, the Tokyo stock market's main Nikkei index closed with a gain of 1.5 per cent and the Hong Kong Hang Seng advanced two per cent.

European markets were little changed, with London's FTSE 100 index off 26.8 points to 6,193.8 while the German DAX rose 16.97 to 7,052.92 and the Paris CAC-40 gained 17.89 to 4,994.1.