Rally cools off

Mar. 17, 2009 (Baystreet.ca) --

10:42 am EST The Toronto stock market was lower in early trading Tuesday as investors stepped back following five days of sharp gains that had sent the main index up almost 11%

New York markets were also weak a day as a four-day rally fizzled with investors taking in a dividend cut by Dow component Alcoa Inc.

Toronto's S&P/TSX composite index subsided 33.91 points in the first half-hour of trading Tuesday to 8,352.80 after a streak of five straight advances.

Economically speaking, Statistics Canada said sales dropped 5.4% to $41.7 billion as motor vehicle and motor vehicle parts industries, particularly in Ontario, reported record decreases during the month.

Excluding motor vehicles and parts and accessories, manufacturing sales decreased a more moderate 1.2% compared with December.

The TSX financial sector moved lower as CIBC gave back 57 cents to $45.52.

The energy sector was down as Suncor Inc. lost 58 cents to $31.83.

The base metals sector trailed yesterday's close with Teck Cominco Ltd. off nine cents to $5.19.

The Canadian dollar was down .19 of a cent to 78.44 cents U.S.

BAYSTREET

Of the 13 TSX subgroups, seven were in negative territory. Gold was off 3%, materials, down 2.7% and metals and mining suffered 2.5%.

Of the six gaining groups, financials were up 0.8%, consumer discretionaries up 0.5%, health-care stocks up 0.4%.

The TSX Venture Exchange was off 1.42 points to 845.90, while the Nasdaq Canada index up 1.46 to 402.46.

ON WALLSTREET

The Dow Jones Industrials average eked out a gain of 3.74 points to register at 7,220.71 in the early going. The S&P 500 regained 2.8 points to 756.69, while the Nasdaq marched 13.49 to 1,417.51.

Shares in American aluminum giant Alcoa Inc. dropped 58 cents to $5.54 U.S. after it said late Monday that it will chop its dividend to three cents a share from 17 cents a share. The move will save Alcoa more than $400 million U.S. a year.

Investors showed little reaction to better-than-expected data about the battered housing market.

On the economic front, the U.S. Commerce Department said Tuesday new home construction rose unexpectedly to an annual rate of 583,000 in February from a revised 477,000 in January.

Building permit applications, a key measure of future activity, also rose. Applications increased three per cent to an annual rate of 547,000.

The collapse of the U.S. housing market has been one of the key drivers of the ongoing recession.

Separately, a key inflation report showed wholesale prices rose 0.1% in February. The producer price index rose 0.8% in January.

The April crude contract in New York rose 36 cents to $47.71 U.S. a barrel

The April bullion contract on the New York Mercantile Exchange was down $4.20 to $917.80 U.S. an ounce.