TORONTO - The Toronto stock market closed down slightly Wednesday as a higher U.S. dollar helped depress commodity prices and investors took in news of sluggish expansion in the U.S. services sector last month.
The S&P/TSX composite index dipped 17.88 points to 11,390.46 after U.S. manufacturing and housing data had pushed the main index up about 300 points over the previous two sessions.
"This market is very tentative here," said Fred Ketchen, manager of equity trading at Scotia Capital.
He said people might expect things to settle down after a "lousy" final three weeks of January but "I'm not sure all of the weakness has disappeared."
The Canadian dollar was down 0.38 of a cent to 94.13 cents US.
The service sectors of the U.S. economy rebounded in January, according to the Institute for Supply Management's non-manufacturing index, which rose to 50.5 from 49.8 in December. While showing expansion in the sector, it was slightly weaker than the 51 reading that had been expected.
There was also improvement in the index's employment component, gaining one point to 44.6, which still indicates job losses but at a slower rate.
Other encouraging data also came out just two days before the release of the January non-farms payroll report in the United States.
The ADP employment report said private-sector firms eliminated 22,000 jobs in January - a drop that was smaller than the 30,000 cuts forecast by economists. It provided further evidence that unemployment is stabilizing.
Expectations have been high for Friday's U.S. government jobs report, with economists predicting the economy added about 20,000 jobs last month.
The base metals sector was the biggest percentage decliner on the Toronto stock market, down 3.79 per cent as March copper moved 12 cents lower to US$2.97 a pound. Teck Resources (TSX:TCK.B) declined 84 cents to C$36.86.
Shares in HudBay Minerals Inc. (TSX:HBM) moved down 23 cents to $12.46 after the company said it expects the restart of its Chisel North mine in northern Manitoba to offset an expected decline in 2010 production as another mine reaches the end of its producing life. Chisel North had been shut down because of low metal prices.
The telecom sector was down 0.81 per cent with Rogers Communications Inc. (TSX:RCI.B) off 38 cents to $33.05. The stock moved lower Tuesday after Goldman Sachs Group Inc. added the company to its "conviction sell" list on expectation the company's growth will slow "for the foreseeable future."
The financials sector was also a drag, down 0.41 per cent with Bank of Montreal (TSX:BMO) slipping 43 cents to $52.78.
Canaccord Financial Inc. (TSX:CF) shares fell eight cents to $9.80 as the company declined comment on a report it's considering a bid for privately held Genuity Capital Markets.
The energy sector moved up a slight 0.21 per cent. The March crude contract on the New York Mercantile Exchange gained 25 cents at US$76.98 a barrel while data showed that U.S. crude inventories rose by a smaller than expected 2.3 million barrels last week. Canadian Natural Resources (TSX:CNQ) advanced $1.14 to C$71.85.
Investors also continued to take in earnings reports from the energy industry.
Calgary-based pipeline operator Enbridge Inc. (TSX:ENB) reported that its fourth-quarter net earnings increased 14 per cent to $300 million or 80 cents a share before adjustments. The showing missed estimates by a penny a share.
Enbridge Inc. (TSX:ENB) also announced its pipeline system has been chosen to carry production from the Leismer oilsands project owned by Statoil Canada Ltd. The Statoil Leismer project will become the sixth to use Enbridge's regional oilsands system, an important element in getting energy from northern Alberta to users. Enbridge shares rose 76 cents to $47.65.
Imperial Oil Ltd. (TSX:IMO) reported that its quarterly profits dropped by 19 per cent to $534 million or 62 cents a share, with the biggest challenges coming from the refining and marketing part of its business. Earnings missed expectations of 71 cents a share and its shares were down 55 cents at $38.90.
The gold sector was off 0.62 per cent as the April bullion contract on the Nymex moved down $6 to US$1,112 an ounce. But Kinross Gold Corp. (TSX:K) gained 22 cents to C$18.47 .
The TSX Venture Exchange inched 3.09 points lower to 1,513.98.
New York markets were mainly lower with the Dow Jones industrial average closing down 26.3 points to 10,270.55.
The Nasdaq composite index added 0.85 of a point ahead of earnings from tech bellwether Cisco Systems to 2,190.91 while the S&P 500 index lost 6.04 points to 1,097.28.
After the close, Cisco reported net income of US$2.3 billion or 40 cents share, beating analyst estimates of 35 cents a share. Its shares were up 1.25 per cent in after hours trading.
In other earnings news, U.S. drugmaker Pfizer Inc. was a major weight, down 44 cents to US$18.62 as the company said its fourth-quarter profit more than doubled to US$767 million, but the result lagged Wall Street estimates. It also scaled back revenue estimates.
Meanwhile, shares in automaker Toyota fell $4.69 or six per cent to US$73.49. The fall came even as U.S. Transportation Secretary Ray LaHood said he misspoke when he said early Wednesday that owners of Toyota cars and trucks should stop driving them because of problems with accelerator pedals in some models. Toyota shares had fallen as low as US$71.90 before LaHood clarified his remarks.