Gold, banks weigh TSX

Bay Street stocks remained notably lower in Tuesday trading, led by weakness in the gold and financial sectors. The Canadian market followed the lead of stocks in the U.S. and Europe.

The S&P/TSX Composite Index was down 101.35 points. or nearly a full percentage point, to end the first half of 2009 at 10,375.22. The market had closed higher in each of the last five sessions.

Gold stocks were down and materials stocks lost ground as such stocks as New Gold dropped 2.8% to $3.15, Eldorado lost 4% to $10.45, Goldcorp declined 3.6% to $40.33 and Barrick Gold slipped 3.5% to $38.94.

Financials declined as the big six banks saw weakness. Bank of Montreal was down 2% to $49.00, National Bank lost 2.5% to $53.60 and Royal Bank was down 2.1% to $47.67.

Sun Life Financial lost 5.1% to $31.15 after the company announced the completion of a public offering in Canada of $300 million principal amount of Series D Senior Unsecured 5.70% Debentures due 2019. The net proceeds will be used for general corporate purposes, including investments in subsidiaries.

In other corporate news, TransAlta Corp. dropped 6.2% to $22.42 after Credit Suisse downgraded the shares to Neutral from Outperform with a price target of $25.50.

JLL Partners announced it's made an offer to acquire Patheon at a price of $2.00 U.S. cash per share. Patheon stock lost 0.7% to $2.81.

On the economic front, Statistics Canada says the nation's economy contracted for a ninth month in April because of falling output in the retail, manufacturing and energy industries.

The nation's number crunchers said gross domestic product declined 0.1% during the month, in line with the median estimate of 21 economists surveyed by Bloomberg News.

There were increases in the activities of real estate agents and brokers and wholesale trade.

Manufacturing production fell 1% in April on weak foreign demand, particularly among primary metal, petroleum and coal, food, paper and wood products makers. However, motor vehicle production and computer and electronic product manufacturing were both up.

A separate report showed that industrial product prices fell 1.1% in May following a 0.5% decrease in April. Economists had been expecting a more modest decrease in industrial product prices of about 0.6%.

The Canadian dollar was down 0.48 cents to 85.97 cents U.S.

ON BAYSTREET

Of the 13 TSX subgroups, nine traveled downward by lunch time. Gold suffered the biggest loss, at 2.9%, while utilities were 2.8% lower, and materials were off 2.5%.

Gainers were led by information technology, which rallied 1.1%, consumer discretionaries, gaining 0.4% and consumer staples, ahead 0.3%.

The TSX Venture Exchange slipped 13.59 points, to 1,091.97, while the Nasdaq Canada Index gained 8.80 points to 690.88.

ON WALLSTREET

In New York, stocks slipped Tuesday, at the end of the S&P 500's best quarter in more than a decade, with a weaker-than-expected consumer confidence report and a slump in oil prices sparking the selloff.

The Dow Jones Industrials average tumbled 82.38 on the day, to 8,447. The S&P 500 index slid 7.90 points to 919.33. The Nasdaq gave back 9.02 points to 1,835.04.

Stocks had gained Monday as investors scooped up shares hit in the recent selloff. But the advance petered out Tuesday at the end of a strong quarter on Wall Street. According to preliminary tallies, the S&P 500 gained 15% for its best quarter since the final three months of 1998.

The S&P 500 surged 40% after bouncing off 12-year lows hit March 9. But in the last two weeks, stocks have fallen modestly as investors have worried that the market got ahead of any economic improvement.

As of Monday's close, the Dow had gained 12% this quarter, and was on track to have seen its best quarter since the second of 2003. The Nasdaq had gained 21% and was on track to post its best quarter since the second of 2003.

Oil prices went lower, which dragged on big oil services stocks, including Chevron, Exxon Mobil, Sunoco and Hess.

Economically speaking, the June Consumer Confidence index from the Conference Board fell to 49.3 from a revised 54.8 in May, versus forecasts for a rise to 55.3.

The S&P/Case Shiller 20-city home price index fell 18.1% in April from a year ago versus forecasts for a drop of 18.6%.

But on a month-over-month basis, the index showed some improvement. Prices fell 0.6% versus March, after posting a 2.2% drop in the previous month.

The Chicago PMI, a regional read on manufacturing, rose to 39.9 in June from 34.9 in May.
Economists thought it would rise to 39.

Treasury prices faltered, with the yield on the benchmark 10-year note moving up to 3.53%. Treasury prices and yields move in opposite directions.

Oil prices shed $1.60 a barrel to $70.07 U.S.

Gold prices subsided $13 an ounce at $927 U.S.