TSX lower as RIM disappoints, gold stocks retreat; N.Y. down following data

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was negative Friday morning but losses would likely be minimal if not for a steep slide in shares of market heavyweight Research In Motion Ltd. (TSX: RIM.TO) after the BlackBerry maker disappointed with its outlook and most recent revenues.

The S&P/TSX composite index lost 61.7 points to 11,224.1 with market support coming from energy and mining stocks in particular following two days of sharp declines amid worries about the sustainability of this year's rally and news of an unexpected drop in sales of existing homes in August.

But markets have been resilient despite rising more than 50 per cent since the lows of early March, punctuated by short pauses for profit taking before moving higher.

"We've been of the view for a while that the market wants to go higher," said Stephen Uzielle, portfolio manager at ScotiaMcLeod Equity Advisory.

"It will have some bad days as it takes a breather, or the news isn't quite as positive as what people were looking for but it won't be sort of allowed to pull back any significant degree because there's so much cash on the sidelines, it's looking to buy (into) the dips."

RIM shares down $13.66 or 15 per cent to $76.50 after the company said that adjusted earnings came in at $1.03 a share, better than the $1 a share that analysts expected.

But revenue came in at $3.53 billion, well below the $3.62 billion that was expected.

RIM signed 3.8 million net new BlackBerry subscribers in the quarter, which was less than the four million analysts were looking for. Its third-quarter revenue and earnings both missed analyst expectations.

The Canadian dollar inched 0.06 of a cent lower to 91.77 cents US.

The energy sector was a bright spot, up 0.7 per cent as oil prices rose after demand concerns shaved almost $6 a barrel over the last two sessions. The November crude contract on the new York Mercantile Exchange was up 49 cents to US$66.38 a barrel. Canadian Natural Resources (TSX: CNQ.TO) was ahead $1.06 to $72.90.

Compton Petroleum Corp. (TSX: CMT.TO) shares rose seven cents to $1.26 after it said its $150-million equity offering has been delayed, pending receipt of a "no-objection" letter from the U.S. Financial Industry Regulatory Authority.

The base metals sector was ahead 0.85 per cent as December copper added two cents at US$2.73 a pound. Ivanhoe Mines (TSX: IVN.TO) climbed 49 cents to $13.48 and HudBay Minerals (TSX: HBM.TO) continued to run up sharply after announcing Tuesday it has evidence of a major new copper-gold zone near its Snow Lake concentrator in the Flin Flon area of northern Manitoba. Its shares were ahead 56 cents to $11.95, up sharply from Monday's close of $9.37.

The TSX Venture Exchange was off 2.48 points to 1,253.88.

New York markets were lower following more U.S. economic data that cast further doubt on the strength of an economic recovery.

The Dow Jones industrials index was down 16.1 points to 9,691.3 after the U.S. Commerce Department reported that orders for durable goods dropped 2.4 per cent in August, after increasing a revised 4.8 per cent in July, a far worse showing than the 0.5 per cent increase that investors had expected.

Excluding aircraft and other transportation goods, orders were flat in August, also below analysts' expectations of a 0.5 per cent rise.

And new U.S. home sales posted a tepid 0.7 per cent increase last month, which missed Wall Street expectations.

While it was the fifth straight increase and the strongest report in 11 months, sales were down 4.3 per cent from the same month last year.

The Nasdaq composite index was weighed down by RIM's earnings report, falling 10.87 points to 2,096.74 while the S&P 500 index declined 2.9 points to 1,047.9.

Traders will be watching a meeting of leaders from the world's 20 largest economies in Pittsburgh for indications of how those governments plan to bring about a strong, sustainable recovery.

Elsewhere in the commodity sector, the December gold contract on the Nymex declined $4.20 to US$994.70 an ounce, taking the gold sector down a 0.6 per cent. On the TSX, Goldcorp Inc. (TSX: G.TO) faded 90 cents to C$42.05.

Overseas, London's FTSE 100 index was ahead 0.57 per cent, Germany's DAX dipped 0.34 per cent while the Paris CAC 40 moved down 0.23 per cent.

Asian markets closed down, with Tokyo the heaviest loser. The Nikkei 225 stock index shed 2.6 per cent, after Nomura, the country's leading brokerage, announced its biggest shares sale ever, weighing on the broader market.

Hong Kong's Hang Seng lost 0.1 per cent and China's Shanghai index dropped 0.5 per cent.