Stumbling toward month-end

Mar. 27, 2009 (Baystreet.ca) --

10:25 am EST The Toronto stock market backed off sharply in early trading today as investors took some profits at the end of another positive week.

New York markets also fell following data showing rising consumer spending for a second straight month, but dropping personal incomes.

The S&P/TSX Composite Index opened 146.92 points in the red, to 8,848.58. That had left the main index about 40 points above where it started the year, and up 19% since the market's rally took off March 10.

Canadian investors digested plans by the Ontario government to give businesses $4.5 billion in tax cuts over three years. The provincial corporate income tax rate is to drop to 10% by 2013 from the current 14.

The TSX energy sector weakened as EnCana Corp. gave up $1.92 to $52.76 and Suncor Inc. declined 90 cents to $29.

The Toronto financial group fell, as TD Bank lost 62 cents to $43.57 and Royal Bank pulled back 51 cents to $36.97.

The gold sector declined as Barrick Gold Corp. faded 67 cents to $40.11.

Agrium Inc. is raising its bid for CF Industries Holdings Inc. to $4.2 billion U.S. - about 20% above the original bid. Agrium shares lost $1.36 to $47.62.

Magellan Aerospace descended two cents to 33 cents after it said it may be unable to continue as a going concern despite erasing losses in both the full year and fiscal fourth quarter of 2008.

Magellan needs to renew a credit facility and win an extension on a $50-million loan if it hopes to stay aloft.

The Canadian dollar tumbled 0.39 cents to 80.86 cents U.S.

ON BAYSTREET

Of the 13 TSX subgroups, all but one were negative. Energy stocks suffered 2.5%, followed by gold and metals and mining, each group off 2.1%.

Only utilities eked out a slight gain at 0.1%.

The TSX Venture Exchange fell back 2.46 points to 971.56 while the Nasdaq Canada Index picked up 2.41 to 469.07

ON WALLSTREET

The Dow Jones Industrials average stumbled 124.73 points in the first half-hour of trading, to 7,799.83, largely retracing yesterday's 175-point rise, which had put the blue-chip average up by more than 20% since the start of the rally.

The S&P 500 index had lost 13.89 points to 818.97, while the Nasdaq subtracted 29.41 points to 1,557.59

The U.S. Commerce Department reported that consumer spending edged up 0.2% in February, in line with expectations. That follows a 1% jump in January, upwardly revised from the 0.6% rise originally reported.

But the report also said incomes fell 0.2% in February, the fourth drop in five months, reflecting massive job cuts.

Signals out of the corporate world, meanwhile, were downbeat.

Internet powerhouse Google Inc. is laying off nearly 200 workers, while technology consulting and outsourcing firm Accenture lowered its outlook for the quarter and the year.

And Johnson Controls Inc., whose products include auto parts and building systems, will cut jobs and close 10 plants in its second restructuring effort provoked by the vehicle-industry skid.

The May crude contract on the New York Mercantile Exchange fell $1.87 to $52.47 U.S. a barrel.

The April bullion contract in New York dropped $14.60 to $925.40 U.S. an ounce.