TORONTO – The Toronto stock market was negative Tuesday and commodity prices slid amid data showing China’s manufacturing sector barely in expansion mode in April.
The S&P/TSX composite index fell 24.37 points to 12,066.31 as the latest economic growth worries about the world’s second-biggest economy pushed mining stocks lower.
The market was also pressured by earnings reports with traders expressing disappointment with mining giant Teck Resources (TSX:TCK-B.TO) and telecom Rogers Communications (TSX:RCI-B.TO).
The Canadian dollar was up 0.04 of a cent to 97.5 cents US as Statistics Canada reported that retail sales rose 0.8 per cent to $39.5 billion in February, a second consecutive monthly sales gain. However, the agency said that retail sales in volume terms were flat after removing the effects of price changes, particularly higher gasoline prices. .
A strong earnings report from chemical company DuPont helped send U.S. indexes higher with the Dow industrials up 139.23 points to 14,706.4 the Nasdaq rose 33.4 points to 3,266.96, while the S&P 500 index climbed 13.82 points to 1,576.32.
Traders were also encouraged by data showing U.S. sales of new homes rebounded in March to the second fastest sales pace in three years.
The Commerce Department says sales of new homes increased 1.5 per cent in March to a seasonally adjusted annual rate of 417,000. Sales have risen 18.5 per cent from a year ago. The median price of a new home was $247,000 in March, up three per cent from a year ago.
Prices for oil and copper slid as a preliminary survey by HSBC Corp. found that China’s manufacturing growth slowed in April, in a further sign that the economy is slowing.
HSBC’s monthly purchasing managers’ index fell to a worse-than-expected 50.5 from March’s 51.6. Anything below 50 would have signalled a contraction in activity.
Data released last week showed the world’s second-largest economy grew at a 7.7 per cent rate in the most recent quarter, crushing hopes for growth of around eight per cent.
That disappointing data and a downgrade of global economic growth by the International Monetary Fund pushed the TSX well into negative territory for the year, leaving the main index down about three per cent year to date.
The Chinese data out Tuesday raised fresh worries about demand and the base metals sector gave back three per cent as May copper on the Nymex fell three cents to US$3.10. Goldman Sachs on Monday cut its three-, six- and 12-month copper forecasts following a heavy selloff over the past two months. Taseko Mines (TSX:TLM.TO) was down 11 cents to $1.99.
Teck Resources Ltd. (TSX:TCK-B.TO) posted an adjusted profit of $328 million, or 56 cents per share, in the first quarter, down from $544 million, or 93 cents per share in the same period last year. That beat analyst estimates of 37 cents a share.
Teck also said it achieved all-time record first quarter coal sales of 6.6 million tonnes despite relatively weak market conditions and repairs at Westshore terminals which continued into early February but its shares fell $1.48 to C$24.53.
The gold sector lost almost three per cent with losses for gold picking up during the morning. The June bullion contract was off $13.90 at US$1,407.30 an ounce. Goldcorp (TSX:G) faded 95 cents to C$28.37.
The energy sector gave back 0.5 per cent as the June crude contract on the New York Mercantile Exchange declined 70 cents to US$88.49 a barrel. Canadian Natural Resources (TSX:CNQ.TO) dropped 55 cents to C$29.54.
Encana reported a US$431-million net loss, or 59 cents per share, and $179 million or 24 cents per share of operating earnings in the three months ended March 31. The consensus estimate had been for nine cents per share of operating income, according to Thomson Reuters. Its shares gained 15 cents to $19.44.