Stocks take pasting

All TSX subgroups lower

May 4, 2010 (Baystreet.ca) --

The Toronto stock market was lower Tuesday, led by declines in commodity stocks as investors unnerved over the European debt crisis pushed the U.S. dollar higher, which helped to depress prices for oil and metals.

The S&P/TSX composite index slumped 163.18 points, or 1.3%, by midday to 12,033.33.

The TSX energy sector lost ground with Canadian Natural Resources down $1.46 to $77.48.

The U.S. Energy Department's Energy Information Administration is scheduled to release last week's supply data Wednesday.

In Canada's oilpatch, Suncor Energy Inc. beat earnings expectations as the company benefited from higher energy prices and its 2009 takeover of Petro-Canada. The Calgary-based company handed in earnings of $716 million, or 46 cents a share for the three months ended March 31.

That compared with a net loss of $189 million or 20 cents a share for the first quarter of 2009 and its shares were ahead 60 cents at $35.28.

The base metals sector dropped some of its strength as July copper on the Nymex declined six cents to $3.22 U.S. a pound. Teck Resources moved down $1.17 to $37.63 and HudBay Minerals gave back 52 cents to $12.27.

Financials also weighed on the TSX with CIBC down 73 cents to $73.87.

Among gold issues, Barrick Gold Corp. advanced 81 cents to $44.14.

In other earnings news, Loblaw Co. Canada's largest grocery retailer said it earned $137 million or 50 cents per share during the last quarter -- better than the 44 cents a share that analysts expected and up from $109 million or 40 cents per share a year ago.

Loblaws revenue was up 3.1% compared with the same time last year, rising to $6.9 billion from $6.7 billion -- thanks largely to the acquisition of T&T Supermarket Inc., a chain that caters to ethnic Chinese customers. Loblaws shares rose 79 cents to $38.59.

WestJet Airlines Ltd. said it earned $13.8 million or 10 cents per diluted share in the first quarter on revenue of $619.8 million. Rising fuel costs helped drive down profit by 63% from a year ago. Earnings missed expectations of 15 cents a share and its shares fell 43 cents to $13.22.

News and information giant Thomson Reuters reported that its net income was $134 million (U.S.) or 15 cents per share in the first quarter with $3.14 billion (U.S.) of revenue. The profit was down $59 million from $193 million (U.S.) in the first quarter of 2009, including discontinued operations. Revenue during the first quarter of 2009 was about $3.13 billion.

Thomson Reuters added that it continues to expect 2010 annual revenue will be flat or slightly below last year's and its shares dipped four cents to $36.74.

Beer maker Molson Coors said its first-quarter profit climbed 38% to $104.6 million U.S. on a tax-related gain. But consumers bought less of its beer and costs rose, causing adjusted results to miss analyst expectations. In New York, the company's stock was down 41 cents to $44.13 U.S.

The Canadian dollar plummeted 1.14 cents to 97.84 cents U.S.

ON BAYSTREET

All 14 TSX subgroups approached noon lower. Metals and mining stocks were the worst off, dropping 4.4%, followed by cousins in the global base metals sector, off 3.5%. Industrials suffered a 1.8% drop.

The TSX Venture Exchange dropped 44.75 points to 1620.79, while the Nasdaq Canada index backpedaled 24.90 points to 764.66.

ON WALLSTREET

In New York, stocks slumped Tuesday, with the Dow down more than 200 points, on worries that the $146-billion U.S. debt package for Greece won't be enough to stave off bigger European debt problems.

The Dow Jones industrial average collapsed 220.15 points, or 2%, at lunch time, to 10,931.68

The S&P 500 index slipped 26.53 points to 1,175.73. The Nasdaq composite index stumbled 73.98 points to 2,440.26

The euro fell to a new yearly low versus the dollar, pummeling dollar-traded energy prices and stocks. Bank and tech shares slipped as well. Stock declines were broad-based, with 28 of 30 Dow shares falling.

Stocks rallied Monday after European leaders agreed to provide Greece with $146-billion U.S. in loans over three years -- with promises of the first payment due to arrive ahead of a key May 19 deadline, when the nation owes over $11 billion U.S.

The bailout package -- funded jointly by the European Union and the International Monetary Fund -- seemed to set a template for other bailouts, should they be needed. Greece is one of the so-called PIIGS -- five European nations with heavy debt loads that investors fear could destabilize the euro and slow global growth should they all default. Portugal, Italy, Ireland and Spain are the other four.

But relief about the plan turned to worries about its execution Tuesday on concerns that not all of the 15 other euro zone nations would be willing to get on board. Influential Germany said Monday it would commit to loaning $40 billion U.S. to Greece over the three years, but it's not yet clear whether the whole group will be willing to participate.

In addition, after a steady advance for about eight weeks, the Dow and Nasdaq fell last week, with investors pleading exhaustion.

On Tuesday, the CBOE Volatility index, or the VIX, Wall-Street's so-called fear gauge, spiked 17% to hit the highest level since Feb. 11.

A number of major companies reported quarterly results before the start of trading.

Among the standouts: Dow component Merck reported higher quarterly revenue and earnings that topped estimates.

Fellow Dow component Pfizer also reported higher quarterly revenue and earnings that topped estimates.

In other company news, financial data services provider Interactive Data will be going private, with owner Pearson accepting a $3.4-billion U.S. buyout from investment firms Silver Lake and Warburg Pincus.

Economically speaking, pending home sales rose 5.3% in March after climbing 8.3% in February. A consensus of economists surveyed by Briefing.com expected sales to increase 5%.

Factory orders were 1.3% higher in April after rising 1.3% in March, the Commerce Department said. Economists thought orders would fall 0.2%.

President Obama was due to speak to the Business Council in Washington about the economy.

Treasury prices shot up sharply, lowering the yield on the 10-year note to 3.62% from Monday's 3.70%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil tailed off $2.90 to $83.29 U.S.

Gold prices sank eight dollars to $1,175 U.S. an ounce.