TH: TSX opens slightly lower as investors await U.S. home sales data
The Toronto stock market opened little changed Monday as investors awaited guidance from U.S. home sales data on an otherwise slow day for economic data.
The S&P/TSX composite index slipped 12.24 points to 11,701.97.
There were few major companies scheduled to report earnings Monday. Instead, investors will be keeping an eye on new home sales data for June that will be released midmorning by the U.S. Commerce Department.
Economists are expecting a bump in sales, up 6.7 per cent to an annualized 320,000. This followed a plunge of 32.7 per cent in May to the lowest level since the data was first recorded in 1963. There has been concern that the market was being propped up by a tax credit for home buyers and it will continue to struggle now that there are fewer incentives.
The September crude contract lost 12 cents to US$78.86 a barrel on the New York Mercantile Exchange after tropical storm Bonnie petered out when it reached the Gulf of Mexico and didn’t damage any of the region’s oil installations.
The Toronto energy sector was flat. Shares in Suncor Energy Inc. (TSX:SU) slipped 10 cents to C$33.28.
Gold stocks slipped 0.2 per cent as the August bullion contract added $3.70 to US$1,191.50 an ounce. Shares in Goldcorp Inc. (TSX:G) lost 25 cents to C$41.99.
The base metals sector lost 0.3 per cent as the September copper contract added 1.8 cents to US$3.20 a pound. Shares in Teck Resources Ltd. (TSX:TCK.B) fell 13 cents to C$36.87.
The financial sector slipped 0.1 per cent. TD Bank (TSX:TD) stock fell five cents to $71.84.
The Canadian dollar added 0.28 cent to 96.80 cents US.
The TSX Venture Exchange gained 0.38 points to 1,395.36.
Markets racked up some big gains in the latter half of last week, with the Dow Jones adding more than 300 points or three per cent in two days, putting it within four points of getting back into positive territory for the year. The Toronto stock market also climbed, although less dramatically than its counterparts in New York.
This followed the results Friday of so-called “stress tests” of European banks, which found that only seven of 91 banks tested would fail if the economy weakened.
Volatility has dominated markets in recent weeks, with investors weighing mixed earnings out of the U.S. and some less-than-impressive economic data. However, some key companies have impressed with higher-than-expected revenue and bright outlooks, adding to hopes that the global economy is recovering.
New York markets were mixed. The Dow Jones industrial average slipped 0.75 points to 10,423.87. The Nasdaq composite index was down 3.74 points at 2,265.73 while the S&P 500 index gained 8.98 points to 1,102.65.
Results due out Tuesday from oil company BP PLC will likely be closely watched because of reports that embattled CEO Tony Hayward will step down and the company could take a big charge to cover costs of cleaning up the oil spill in the Gulf of Mexico.
Canadian earnings season will get going in earnest this week and will help give direction to the Toronto stock market.
In Canadian corporate news, shares in LAB Research Inc. (TSX:LRI) added six cents or 20 per cent to 26 cents after the company said it has been selected to supply a wide variety of its contract services, including toxicology, to a Japanese pharmaceutical firm.
Forestry company Tembec Inc. (TSX:TMB) said unionized workers have ratified a new five-year labour contract covering 680 employees at its flagship operation in Temiscaming, Que. Shares in Tembec added 10 cents or 5.2 per cent to $2.03.
And shares in Silvercorp Metals Inc. (TSX:SVM) fell 21 cents or 3.1 per cent to $6.66 after the company estimated its ore production for the current quarter will be down 10 per cent as a consequence of heavy rain last month. Silvercorp said it will spend about $1 million to repair and clean up four mines in China’s Ying mining district within 30 days.
European markets were mixed as investors had their first chance to react to the health of the continent’s big banks.
Britain’s FTSE 100 gained 0.1 per cent, Germany’s DAX index fell 0.1 per cent, and France’s CAC-40 fell 0.2 per cent. Japan’s Nikkei stock average rose 0.8 per cent, while Hong Kong’s Hang Seng index added 0.1 per cent.
