Energy and gold stocks nudge TSX down; N.Y. flat on mixed data

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was in the red Tuesday morning as oil and bullion prices declined, a day after the main TSX index closed at a new record high.

New York markets were little changed as April retail sales came in better than expected, which helped balance a glum outlook from Wal-Mart Stores.

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 an acquisition the companies value at US$13.9 billion.

Toronto's S&P/TSX composite index moved 50.58 points lower to 14,615.49 after running ahead 145 points Monday on EnCana Corp.'s (TSX: ECA.TO) announcement that it will split into two companies and Research In Motion Ltd.'s (TSX: RIM.TO) new BlackBerry Bold device and software alliances.

Monday's showing pushed the TSX about 40 points past the old record set last July before the financial crisis hit global markets.

However, analysts are nervous because the rally has been based on energy and base metals stocks, along with strong gains by individual companies such as RIM and Potash Corp. (TSX: POT.TO).

The TSX Venture Exchange was off 9.84 points to 2,566.27 while the Canadian dollar moved down 0.09 cent to 99.47 cents US.

New York's Dow Jones industrials slipped 1.63 points to 12,874.68 following a 130-point advance Monday.

The Nasdaq composite index was down 3.88 points to 2,484.61 while the S&P 500 index added 0.35 of a point to 1,403.93.

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 had been 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.

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

The TSX energy sector slipped 0.25 per cent as oil prices declined slightly. The June crude contract on the New York Mercantile Exchange shed seven cents to US$124.16 a barrel and Petro-Canada (TSX: PCA.TO) fell 41 cents to $56.29.

Gold prices were lower on a strengthening greenback with the June bullion contract in New York down $18.10 to US$866.80 an ounce. The TSX gold sector fell over two per cent as Barrick Gold Corp. (TSX: ABX.TO) moved down 78 cents to $38.17.

Iamgold Corp. (TSX: IMG.TO) shares were three cents higher to $6.08 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 75 cents to $47.24.

Uranium miner Cameco Corp. (TSX: CCO.TO) reported first-quarter earnings of $133 million, up by 125 per cent from a year ago as revenue increased 45 per cent to $593 million on higher prices for uranium and gold and an increase in uranium volumes. Its shares were ahead 13 cents to $40.41.

Rona Inc. (TSX: RON.TO) reported a 5.2 per cent decline in same-store sales in the first quarter and an 18 per cent drop in operating profit. Net earnings at the largest Canadian retailer of hardware and renovation products declined to $1 million, compared with $9 million or eight cents per share in the year-ago period and its shares were knocked down 70 cents to $12.75.

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 six cents to $13.68.

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.

But the FTSE 100 index was off 6.3 points to 6,214.3, while the German DAX slipped 41.24 points to 7,077.19 and the Paris CAC-40 gained 31.23 points to 5,007.44.