TORONTO — The Toronto stock market was lower Thursday afternoon after cautious words from the U.S. Federal Reserve and mixed economic data deepened pessimism about the economic rebound in the world’s biggest economy.
The S&P/TSX composite index lost 65.4 points to 11,742.1 while the TSX Venture Exchange moved 0.98 of a point lower to 1,454.91.
The Canadian dollar was down 0.04 of a cent to 96.26 cents US.
The Fed suggested Wednesday that the U.S. economic recovery is uneven and vulnerable to turmoil in the markets. The U.S. central bank made the comment as it also left its key interest rate at an historic low of zero to 0.25 per cent to push the economy out of recession.
The Fed assessment came on the same day that data was released showing that new home sales dropped by 33 per cent to a record low last month.
Meanwhile, on Thursday reports on jobless insurance claims and durable goods orders painted a mixed picture of the economy.
Financials were the weakest sector on Thursday, down 0.81 per cent as finance minister Jim Flaherty said countries calling for a global bank tax are not focusing on the most fundamental issues in worldwide financial reform.
He said Thursday that there won’t be such a tax imposed during the G20 summit because the majority of the countries in the group dion’t want it.
CIBC (TSX:CM) lost $1.47 to $72.84 while Bank of Montreal (TSX:BMO) gave back $1.19 to $60.57.
Manulife Financial’s chief executive says the company is interested in picking up the Asian life insurance unit of U.S. insurer AIG. The comment from Don Guloien comes after the collapse of a US$35.5-billion deal for Prudential PLC to take over American International Assurance Ltd.
He added that “people can be comfortable, though, that we would not be approaching that deal at any price approaching $35.5 billion.” Manulife shares were unchanged at $16.40.
The TSX energy sector fell 1.04 per cent as the August crude contract on the New York Mercantile Exchange lost 30 cents to US$76.05 barrel. Prices were further depressed by a report from the Energy Information Administration on Wednesday that U.S. oil supplies increased by two million barrels last week, while analysts were expecting stockpiles to drop. Suncor Energy (TSX:SU) stepped back 54 cents to C$33.50 while Imperial Oil (TSX:IMO) lost 48 cents to $40.65.
The gold sector was the strongest group, up about one per cent with the August bullion contract on the Nymex up $11.70 to US$1,246.50 an ounce. Barrick Gold Corp. (TSX:ABX) gained 46 cents to $46.92.
The base metals sector was down two per cent even as the July copper contract was up seven cents to US$3.01 a pound. HudBay Minerals (TSX:HBM) fell 40 cents to C$12.36 according to the acting chief executive of the company.