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Feb. 12, 2010 (Baystreet.ca) --
Snapping their three-day rally, Canadian stocks dipped in mid-morning deals Friday amid lingering concerns about the euro zone and easing commodity prices.
The S&P/TSX Composite Index greeted the luncheon bell down 53.29 points -- though off its lows of the day -- to 11,382.20.
News that growth in the German economy stalled in the fourth quarter of 2009 and China increasing its reserve levels for banks to curb inflation weighed on sentiment.
Losses were most pronounced among base metal stocks, with the index shedding 3.03%. Inmet Mining was down 1.66% and First Quantum Minerals lost 4.14%.
Natural resources explorer Teck Resources gave in 1.72%. RBC upped its rating on the stock to an "outperform" from "sector perform".
Silver explorer Silver Standard Resources plunged 6.55% after it said it would raise approximately $100 million through a public offering of its common shares.
Contract drilling operator Precision Drilling Trust trimmed 2.27% after the company slipped in to the red. It reported a fourth quarter net loss of $0.09 per unit, compared to net income of $0.66 per unit last year.
Insurance companies Sun Life Financial and Manulife Financial Corp. continued to move down for the second day, shedding around 2% each, after reporting their quarterly numbers yesterday.
Sun Life said its fourth quarter profits more than doubled to $0.52 per share from $0.23 per share in the year-ago quarter. Manulife reported a fourth-quarter net income of $0.51 per share, compared to a loss of $1.24 in the same period last year. Interestingly, RBC cuts Sun Life price target to $37 from $38 and Manulife rating to "sector perform" from "outperform".
Among gold plays, Anglo Gold was down 2.38% and Lihir Gold surrendered 3.81%.
In the energy sector, Cenovus Energy lost 0.86%. Meanwhile, oil and natural gas explorer Niko Resources rose 0.74% after reporting third quarter net income of $0.29 per share, as against a loss of $0.04 in the same quarter last year.
Specialty pharmaceutical company Labopharm plummeted 19.91%. The company today announced that it has priced an underwritten public offering of 11,764,706 newly issued units at a public offering price of $1.70 per unit. Gross proceeds are expected to around $20 million.
Shaw Communications surrendered 2.32% after it said it will buy at least 20% stake in the ailing Canwest Global Communications and 80% of its voting stock. On the other hand, Canwest rallied over 40.00%.
Telecommunications service provider TELUS Corp. slipped 1.04% after it said its fourth-quarter net income decreased $0.49 per share from $0.90 in the prior year quarter.
Research In Motion rose 1.45% after its rating was hiked to "top pick" from an "outperform" at RBC.
In economic news, Statistics Canada said New Motor Vehicle Sales increased 2.6% to 128,663 units in December, helped by higher sales in North American-built passengers cars.
The Canadian dollar decreased 0.20 cents to 94.97 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups remained on the down side, with metals and mining suffering the most, off 2.4%, followed closely by global base metals, sliding 2.3%, while gold tailed off 1.5%.
By noon, information technology had inched its way into the green, picking up 0.03%.
The TSX Venture Exchange stumbled 6.88 points to 1,485.78, while the Nasdaq Canada index reversed course and moved upward 8.84 points to 749.25
ON WALLSTREET
In New York, equities tumbled Friday after China's bid to limit bank loans and slower-than-expected European growth raised worries about the strength of the global economic recovery.
The Dow Jones industrial average fell back 88.50 points to 10,055.69. The S&P 500 index staggered 7.11 points to 1,071.36 and the Nasdaq composite stayed 5.04 points in the red to 2,172.37.
A rallying greenback dragged on dollar-traded commodity prices and stocks, as well as companies that do a lot of business overseas and benefit from a weaker dollar.
Stock declines had been even bigger in earlier trading, but the selling eased as the session wore on.
Stocks surged Thursday after the European Union agreed to help out Greece, but the advance was a rare bright spot in what has been a tumultuous start to 2010.
Wall Street extended 2009's rally through the middle of January, lost steam soon after. The Dow, S&P 500 and the Nasdaq have all declined the past four weeks as better-than-expected corporate profit reports have been overshadowed by worries about China slowing its growth, U.S. plans to limit bank trading and European debt issues.
Also in play: the stronger dollar, which has pressured commodities and companies that do a lot of business overseas and therefore benefit from a weaker dollar.
Between rally highs hit Jan. 19 and the lows of last week, the S&P 500 lost over 9%, careening close to the 10% selloff that is the technical definition of a correction. The Dow's high-to-low was just over 7%. It stood about 100 points above the recent low as of 11 a.m. ET Friday.
China told banks to raise reserves for the second time in a month, in an effort to slow lending and contain any inflation threat that could set back the economic recovery.
The government boosted the reserve requirement for financial institutions by a half-percentage point to 16.5% for big lenders and 14.5% for small lenders. Rural lenders will see no change.
China kept its yearly target for bank lending unchanged, suggesting it isn't looking to cut back lending, so much as slow the pace.
Economically speaking, investors also kept an eye on a stronger-than-expected report on retail sales.
The report on January retail sales, delayed by this week's snowstorms in Washington, showed that sales jumped 0.5%. Excluding automobiles, sales jumped 0.6%.
Retail sales were expected to have increased by 0.3% in January, according to a consensus of economist opinion compiled by Briefing.com. Retail sales, without automobiles, were expected to have increased 0.5% last month.
A separate report from the University of Michigan showed that consumer sentiment dipped to 73.7 in early February from 74.4 in late January. Economists thought it would rise to 75.
Treasury prices jumped, thus lowering the yield on the 10-year note to 3.67%, from 3.72% late Thursday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil fell $1.91 to $73.36 U.S.
Gold prices fell five dollars to $1,090 U.S.