The Toronto stock market was lower early Tuesday as oil prices backed off for a fifth session on demand concerns and a warning that prices have run up too high recently.
The S&P/TSX composite index moved down 63.6 points to 12,085.1, led by losses in oil and mining stocks. The TSX Venture Exchange was down 5.81 points to 1,667.86.
The May crude contract on the New York Mercantile Exchange was down 62 cents to US$83.72 a barrel even as the International Energy Agency revised slightly higher its 2010 forecast for global demand for oil.
The energy sector dropped almost one per cent as Suncor Energy (TSX:SU) declined 55 cents to C$34.63 while Canadian Natural Resources (TSX:CNQ) shed 62 cents to $78.07.
Prices have headed lower since the middle of last week on data showing rising inventories.
On Tuesday, the IEA expressed concern that oil markets are “overheated.”
“While some see recovering demand having been sufficient to support the US$70-$80 a barrel prices evident in the last eight months, they nonetheless raise questions over the sustainability of prices markedly higher than those levels,” the IEA said.
Meanwhile, gold prices weakened as the June bullion contract on the New York Mercantile Exchange declined $6.30 to US$1,155.90 an ounce. The TSX global gold index faded 0.55 per cent and Barrick Gold Corp. (TSX:ABX) was down 36 cents to $40.54.
The base metals sector also lost almost one cent even as May copper moved up three cents at US$3.59 a pound. Teck Resources (TSX:TCK.B) dropped 37 cents to $45.07.
All TSX sectors were in the red save for a slight advance in the real estate group.
Meanwhile there was disappointment over the start of the first-quarter earnings reporting season in the U.S. aluminum giant Alcoa Inc. reported Monday after the market closed that its first-quarter loss was smaller than a year ago because demand for some aluminum products has improved. But its adjusted earnings, which exclude one-time charges, still came up a penny short of analysts’ expectations and its revenue also fell below estimates. Its shares were down 24 cents to US$14.33.
Chipmaker Intel Corp. and railroad operator CSX Corp. — both of which are considered bellwethers for their respective industries — report results after the market closes Tuesday.
The Canadian dollar moved slightly higher after Statistics Canada reported that merchandise exports grew 2.8 per cent thanks to a strong showing from industrial goods and materials. The loonie advanced 0.19 of a cent to 99.86 cents US.
Imports grew by 0.9 per cent, adding up to a trade surplus with the rest of the world of $1.4 billion, up from $754 million in January.
In the U.S., the trade deficit widened more than expected in February as exports rose to the highest level in 16 months but this gain was offset by a bigger jump in imports.
The Commerce Department reported that the deficit for February increased 7.4 per cent to US$39.7 billion, larger than the $38.5 billion deficit economists had expected.
New York markets were also weak as the Dow Jones industrial average was 18.1 points lower to 10,987.8.
The Nasdaq composite declined 3.39 points to 2,454.48 while the S&P 500 index was off 2.75 points to 1,193.75.
In other corporate news, France’s leading movie-theatre chain has agreed to install four digital theatre systems from Imax Corp. (TSX:IMX). Imax said the deal follows the success of EuroPalaces’ Disney Village Imax theatre in Paris, which has been recently upgraded to a digital projection system. Imax stock dipped 11 cents to $16.94.
Shares in Viterra Inc. (TSX:VA), one of Canada’s largest agribusinesses, were off three cents to $9.32 after it said that it is selling its half-ownership in the Australian Bulk Alliance. A subsidiary of Japan-based Sumitomo Corp. is paying A$8.6 million, or about C$7.9 million, to buy the remainder of the 50-50 Australian joint venture.
Paramount Energy Trust (TSX:PMT.UN) said Monday it has agreed to sell three properties producing a total of roughly 370 barrels of oil equivalent per day for $34.1 million in cash and stock. Paramount said it will receive $26.5 million in cash from the sale that will be used to reduce debt and shares in an unidentified public oil and gas company valued at $7.5 million. Its shares ticked a cent higher to $4.78.
Discount retailer Dollarama Inc. (TSX:DOL) shares dropped 88 cents to $24.32 after it said Monday that a group of its shareholders have signed a deal for a secondary offering of the company’s shares totalling $250 million.
In overseas developments, Greece was able to sell euro1.2 billion (US$1.63 billion) in short-term notes Tuesday in an auction that drew plenty of buyers. It was Greece’s first debt sale since details of the emergency rescue package were outlined over the weekend.
Asian stock markets mostly fell Tuesday as investors questioned whether the global economic recovery can support further gains to the year-long equities rally.
Japan’s Nikkei 225 led decliners, down 0.8 per cent. Australia fell 0.7 per cent and Hong Kong skidded 0.2 per cent.
London’s FTSE 100 index dipped 0.08 per cent, Frankfurt’s DAX fell 0.03 per cent while the Paris CAC 40 added 0.07 per cent.
