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Dec. 15, 2009 (Baystreet.ca) --
Toronto stocks witnessed lackluster trading at the outset on Tuesday as the upside for resource stocks will be limited following a jump in U.S dollar.
The S&P/TSX Composite gave back 15.85 points to begin the trading day at 11,529.84
The greenback continued to strengthen against major currencies ahead of tomorrow's closely watched interest rate decision from the Federal Reserve.
Though many economists believe Fed will leave rates at record low in its current meeting, traders are looking for some hint about when it will start boosting rates, as recent data signals recovery in the U.S. economy.
In the commodity markets, while gold prices continued to show weakness, due to recent strength in U.S. dollar, oil prices are looking to break the past few days downward trend by moving near the $70 U.S. mark.
In corporate news, Digital Media Inc. said it swings to profit in fourth quarter, reporting $0.02 per share, compared to a net loss of $0.08 per share in the year-ago quarter.
Cangene Corp. reported its first-quarter net income shrank to $0.08 per share from $0.30 per share in the same quarter last year.
Silver Spruse Resources Inc. said it plans non-brokered private placement of $700,000 to be used for general exploration expenditure on the company's Newfoundland and Labrador projects.
WestJet Airlines Ltd. and Royal Bank of Canada announced plans to role out the carrier's new credit card program in late January.
Uranium One said it acquired 50% of the Karatau Uranium Mine in Kazakhstan for $420 million from JSC Atomredmetzoloto.
Statistics Canada reported Tuesday that new motor vehicle sales improved 3.5% to 133,559 units in October, largely helped by better sales of North-American built passenger cars, which rose 7.6%.
In another report, the nation's number crunchers said Canadian labour productivity fell 0.2% in the third quarter, while gross domestic product of business fell 0.1%.
The Canadian dollar was up 0.05 cents to 94.43 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, 10 began the day listing downward. Global base metals slid 0.9%, while health-care and consumer discretionaries declined 0.3% each.
The gainers were led by utilities, up 0.2%, materials were ahead 0.1%, gold was up marginally.
The TSX Venture Exchange staggered 3.46 points to 1,421.62, while the Nasdaq Canada index gained 2.07 points to 694.67
ON WALLSTREET
In New York, stocks dipped early Tuesday, as a surprisingly sharp jump in wholesale inflation and a weaker-than-expected reading on manufacturing gave investors a reason to pause after a four-session advance.
The Dow Jones Industrials stumbled 44.13 points to 10,456.92, while the S&P 500 fell 5.87 points to 1,108.24, and the Nasdaq lost 10.70 points to 2,201.40.
The start of the Federal Reserve's two-day policy meeting and a rebound in the U.S. dollar were also in focus.
Stocks booked gains Monday, with the three leading indexes finishing at new 14-month highs, after Citigroup said it will repay its government bailout funds and Dubai received $10 billion U.S. to cover its debt, easing worries that the emirate might default on billions it owes.
The weak dollar also helped, lifting commodity shares and the stocks of companies that do a lot of business overseas.
The greenback, however, enjoyed a rebound Tuesday. Concerns about fiscal policies in Greece were prompting some investors to seek shelter from the euro. The dollar was also higher against the yen
The latest central bank rate policy meeting gets under way Tuesday, concluding Wednesday.
The Fed is widely expected to hold the federal funds rate, a key overnight bank lending rate, steady at historic lows near zero. But investors are eager to see if the latest policy statement contains any new language that could offer any hints as to when the Fed will begin to raise interest rates.
Wholesale prices jumped last month, the Commerce Department reported Tuesday, as the Producer Price Index (PPI) rose 1.8%.
Analysts were anticipating the reading to climb 0.8% in November.
So-called core PPI, which strips out volatile food and energy prices, also came in higher than expected, climbing 0.5% after falling 0.6% in October.
The Federal Reserve will report on manufacturing activity just before the opening bell. November capacity utilization is expected to have risen to 71.1% from 70.7% in October. Industrial production is expected to have risen 0.5% after rising 0.1% in October.
Wells Fargo said Monday it has reached an agreement with the government to return $25 billion U.S. in bailout money it received during last year's financial crisis. The San Francisco-based bank said repayment of the funds is contingent on a $10.4 billion U.S. common stock offering.
The announcement came the same day that Citigroup said it would repay $20 billion U.S. in bailout funds, and the heads of major financial firms met with President Obama at the White House to discuss ways to increase lending.
Boeing hopes to launch the first test flight of its new 787 Dreamliner in Seattle Tuesday. The plane, which boasts of greater fuel efficiency, has been beset by delays.
Best Buy delivered better-than-expected results before the opening bell. The electronics retailer said it earned profits of $227 million U.S., or 53 cents U.S. a share. Analysts were widely expecting the company to report profits of 43 cents U.S. a share, according to Thomson Reuters.
Also on Tuesday, Dow component General Electric holds its annual outlook meeting for investors.
Treasury prices dropped sharply, raising yields to 3.59%, from Monday's 3.52%. Prices and yields move in opposite directions.
The price of a barrel of oil gained back 88 cents to 70.39 cents U.S.
Gold prices slid six dollars to $1,118 an ounce U.S.