Mini-tumble for stocks

Metals weigh on TSX

May 4, 2010 (Baystreet.ca) --

Canadian stocks experienced a downward open Tuesday amid mixed cues from the commodities prices.

The S&P/TSX composite index slumped 58.48 points in the first hour of trading to 12,124.40

Also, speculation that the $146-billion U.S. aid package for Greece will not suffice the debt crisis in the country may weigh on sentiment.

Meanwhile, the price of gold rose for a sixth straight session, as traders bet bullion as a safe haven buying amid a volatile currency market.

Mining stocks may extend losses after Australia proposed new regulations Monday to levy 40% tax on resource companies effective 2012.

Gold stocks may be in play amid continued upsurge in the price of gold and merger deals announced by gold companies.

In M&A space, gold mining company Lihir Gold announced that Newcrest Mining increased its offer price by 6.4% to acquire all its share for A$9.5 billion.

Gold company Agnico-Eagle Mines announced that it has entered in to definitive deal to buy precious metals explorer Comaplex Minerals

Gold producer Yamana Gold reported lower net income of $0.11 per share compared to $0.12 per share last year, despite a 62% growth in revenues. The company attributed this to lower foreign exchange gains as well as unrealized losses on derivatives. Analysts expected the company to earn $0.11 per share for the quarter.

Integrated energy company Suncor Energy swung to profit in first-quarter, reporting net earnings of $0.46 per share compared with a net loss of $0.20 per share in the prior year period.

Uranium producer Cameco Corp.reported improved first-quarter net earnings at $0.36 per share, up from $0.22 per share in the first quarter of 2009. The company announced a quarterly dividend of $0.07 per share.

Financial news and information provider Thomson Reuters reported lower first-quarter net earnings of $0.15 per share, compared to $0.23 in the year ago quarter.

On an adjusted basis, earnings from continuing operations declined to $0.36 per share, from $0.40 per share in the year-ago quarter. Analysts were expecting the company to report adjusted net earnings of $0.32 per share.

Airlines operator WestJet Airline reported that its first-quarter net earnings descended to $0.10 per share, from $0.29 per share last year. The company said its load factor was 81.7%, compared to 80.4% in the previous year and Revenue Passenger Miles grew 9.7% to 3.840 billions from 3.502 billions in the same quarter a year earlier.

Food and drug distributor Loblaw Companies reported higher first-quarter net earnings of $0.49 per share, compared to $0.40 per share last year. The company expects to invest approximately $1 billion in capital expenditures in 2010.

Wood products company Stella-Jones reported first quarter net earnings of $0.46 per share, down from $0.61 per share last year.

The Canadian dollar plummeted 1.17 cents to 97.80 cents U.S.

ON BAYSTREET

All but three of the 14 TSX subgroups began the day lower. Metals and mining stocks were the worst off, dropping 3.6%, followed by cousins in the global base metals sector, off 2.8%. Industrials suffered a 1.1% drop.

The three gainers were gold, up 1.3%, consumer staples, inching ahead 0.2% and materials, up only 0.04%.

The TSX Venture Exchange sidled back 17.68 points to 1647.86, while the Nasdaq Canada index backpedaled 16.91 points to 772.65.

ON WALLSTREET

In New York, stocks slumped at Tuesday's open, in tune with global markets, on worries that the $146-billion U.S. debt package for Greece could stall out if other euro-zone members don't approve it.

The Dow Jones industrial average hurtled earthward 168.84 points, or 1.5%, at Tuesday's opening, to 10,982.99

The S&P 500 index slipped 20.44 points to 1,181.52. The Nasdaq composite index stumbled 58.48 points to 2,440.26

The dollar surged versus the euro, pummeling dollar-traded energy prices and stocks. Bank and tech shares slipped as well. Declines were broad-based, with 27 of 30 Dow shares falling.

Stocks soared Monday as investors grew more upbeat about the economic outlook and fears about Greece's debt situation eased. The Dow, S&P 500 and Nasdaq all gained at least 1%.

Several major U.S. companies reported earnings before the opening bell, including Dow components Merck and Pfizer.

Excluding certain charges, Merck said it earned 83 cents U.S. per share in the first quarter on sales of $11.4 billion U.S. That was up from 63 cents U.S. a share in profit and $5.4 billion U.S. in sales a year earlier. Analysts surveyed by Thomson Financial had forecast earnings of 75 cents U.S. per share on sales of $11.2 billion U.S.

Pfizer reported first-quarter earnings of 60 cents U.S. per share, up 11% from 54 cents U.S. a year earlier. Sales rose 54% to $16.8 billion U.S. in the quarter. Analysts were expecting earnings of 53 cents U.S. per share and revenue of $16.6 billion U.S.

Archer-Daniels Midland posted fiscal third-quarter net income of $421 million U.S., or 65 cents U.S. per share, compared with $3 million U.S., or breakeven, a year earlier. But earnings were below Wall Street expectations of 72 cents U.S. per share.

CVS Caremark said it earned $771 million U.S., or 55 cents U.S. per share, in the first quarter.

That was up from $738 million U.S., or 50 cents U.S. per share, in the prior year. Excluding certain charges, the drug store chain said it earned 60 cents U.S. per share, versus a 58-cent-U.S.-per-share profit.

Interactive Data agreed Tuesday to a $3.4-billion U.S. buyout deal with investment funds managed by Silver Lake and Warburg Pincus.

Economically speaking, a reading on factory orders was due from the government at 10 a.m. ET.

Economists surveyed by Briefing.com expect orders fell 0.2% in March after a 0.6% rise the month before.

President Obama was due to speak to the Business Council meeting in Washington about job creation and economic growth.

Treasury prices shot up sharply, lowering the yield on the 10-year note to 3.61% from Monday's 3.70%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil tailed off $2.16 to $84.03 U.S.

Gold prices added three dollars to $1,186 U.S. an ounce.