Jan. 27, 2010 (Baystreet.ca) --
The Toronto stock market was still in the red Wednesday afternoon as commodity prices retreated and the U.S. Federal Reserve announced it was leaving its key interest rate unchanged at 0.25% --and said it would keep rates at that level for an extended period.
The S&P/TSX Composite Index ended the day down 17.08 points to 11,344.11.
The base metals sector declined, as March copper fell 12 cents to $3.23 U.S. a pound. Teck Resources fell $1.70 to $37.00 and Labrador Iron Mines Holdings declined 13 cents to $4.43
Bullion prices headed lower. Among gold issues, Kinross Gold Corp. faded 45 cents to $18.04 and Barrick Gold Corp. declined 33 cents to $38.05
The industrials sector lost ground, with Canadian National Railway shares up 16 cents to $55.84 after reporting that profits increased to $582 million in the fourth quarter despite lower revenues.
The railway also increased its quarterly dividend to 27 cents per share, up from 25 cents. The Montreal-based railway said it is aiming for double-digit earnings growth over the $3.24 per share achieved in 2009.
Shares in Canadian Pacific Railway, which reports earnings on Thursday, gained three cents to $54.31 while Bombardier Inc. declined 18 cents to $5.06.
The energy sector was down as demand concerns continued to put pressure on oil prices. EnCana Corp. fell 29 cents to $33.47 and Suncor Energy was down 40 cents to $34.63.
The tech sector strengthened, with Research In Motion Ltd. ahead $2.57 to $68.18.
AGF Management Ltd. reported Wednesday a fourth-quarter profit of $45.5 million, reversing a $19.3-million loss posted in the same period a year earlier. Its shares were up 85 cents to $16.05
A favourable tax adjustment helped boost net earnings at Montreal-based IT services company CGI Group Inc. to $111.2 million in its latest quarter, up 39 per cent from year-earlier profit and above analyst expectations. CGI shares added 15 cents to $14.84.
Also, an upbeat comment by the International Monetary Fund (IMF) on the Canadian economy may help lift sentiment. The IMF has upped its growth forecast estimates on the Canadian economy to 2.6% from 2.1% for 2010, while maintaining that of 2011 at 3.6%.
The Canadian dollar staggered 0.33 cents to 93.95 cents U.S.
ON BAYSTREET
Nine of the 14 TSX subgroups were negative on the day. Metals and mining finished the day off 3.2%, materials were down 1.5%, and gold stocks suffered 1.3%.
Of the five gainers, information technology picked up the most, at 1.4%, while financials prospered 0.9%, and telecoms gained 0.7%.
The TSX Venture Exchange fell 24.73 points to 1,509.38, while the Nasdaq Canada index gained 15.58 points to 698.27.
ON WALLSTREET
In New York, stocks seesawed Wednesday afternoon, trimming earlier losses, after the Federal Reserve held interest rates steady and hinted it would continue to do so for the foreseeable future in an effort to spur the recovery.
The Dow Jones Industrials reversed course and added 41.87 points to 10,236.16. The S&P 500 regained 5.33 points to 1.097.50, and the Nasdaq moved back into the green by 17.68 points, to 2,203.01.
Stocks churned before and after the Fed statement, with gains in technology, telecom and financial stocks tempered by weakness in industrials and commodities. The bank sector surged, with the KBW Bank index up 2.6%.
The central bank opted to hold the fed funds rate, a key short-term bank lending rate, at a historic low near zero. That had been widely expected.
In the closely-watched statement, the bankers offered up little new guidance, saying that the economy has continued to strengthen since December's meeting and that the pace of the slowdown in the labour market is slowing. However, the statement did not provide any insight as to when the Fed plans to loosen its accommodative policy -- something investors are very focused on.
The combination of low interest rates and the injection of trillions of dollars of stimulus into the system helped fuel the stock market rally last year and take the edge off the worst recession since the Great Depression. The Fed is unlikely to step back just yet, especially when the recovery is still tentative.
With his term set to expire Sunday, questions remain about whether Fed Chief Ben Bernanke has enough votes in the Senate to force a confirmation vote. Worries that his term might not be renewed contributed to last week's massive stock selloff, in which the Dow, S&P 500 and Nasdaq all lost 5% in three sessions.
Apple's new iPad, President Obama's State of the Union address, a crop of major earnings and a House hearing on the government bailout of AIG were also in focus.
Apple revealed the new iPad -- a 1.5-lb, half-inch wide tablet computer that falls between a smartphone and a laptop.
Apple shares initially dipped as the announcement was underway but reversed course after the lower-than-expected starting price of $499 U.S. was announced. Rumours had pegged the price as being closer to $1,000 U.S.
Apple shares are down 3% year-to-date as of Tuesday's close, after spiking 147% in 2009.
In his address to the nation tonight, President Obama is expected to talk about how the government plans to temper the growing deficit over the next decade, even as it continues to promote economic growth in the aftermath of the recent recession.
Obama rattled Wall Street last week when he called for greater restrictions on the biggest financial firms, including limiting the ability of commercial banks to make high-risk trades and stopping them from owning or investing in hedge funds.
He is not expected to directly address that particular proposal, but his rhetoric on the banking system and the economy will be closely watched by Wall Street.
Economically speaking, new home sales plunged to a nine-month low, according to a Census Bureau report released Wednesday morning. Sales fell 7.6% to a seasonally-adjusted annual rate of 342,000 in December from a revised rate of 370,000 in November.
Shares of Caterpillar slid 7% after the heavy-machinery maker issued a 2010 earnings forecast of $2.50 U.S. per share, short of the $2.71 U.S. per share analysts are expecting, on average. The Dow component said that a global economic recovery only favours some of its business units rather than all.
Caterpillar also reported weaker quarterly earnings that nonetheless topped estimates and weaker revenue that missed expectations.
After the close Tuesday, Yahoo reported a quarterly profit that reversed a year-ago loss, as the online advertising market showed some signs of life. Results were better than expected. The Internet behemoth also reported weaker quarterly revenue that topped estimates. Shares gained 2.2% Wednesday morning.
Treasury prices dipped, raising the yield on the 10-year note to 3.63% from Tuesday's 3.61%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil stumbled $1.06 to $73.65 U.S.
Gold prices dipped $13 to $1,087 U.S.
