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Stocks lower in early trading as investors assess April housing stats

Canadian Press, The Canadian Press
0 Comments| May 16, 2014

TORONTO _ The Toronto stock market was lower amid the latest round of economic worries.

The S&P/TSX composite index dropped 39.76 points to 14,549.13.

The Canadian dollar was down 0.05 of a cent at 91.89 cents US.

U.S. indexes were uneven as traders digested a solid report on housing starts.

The Dow Jones industrials dipped 5.14 points to 16,441.67 as starts for April came in at an annualized pace of 1.072 million units, higher than the 980,000 that economists had expected.

The Nasdaq fell 8.16 points to 4,061.13 while the S&P 500 index eased 1.02 points to 1,869.83.

The TSX fell 85 points Thursday, and the Dow tumbled 167 points after data showed the economic recovery in Europe is more fragile than thought while retail giant and economic barometer Wal-Mart Stores delivered a disappointing outlook for the second quarter.

``Financial markets are clearly still skittish from the lack of positive catalysts this week,'' said BMO Capital Markets senior economist Carl Campus.

Traders will be particularly interested in the University of Michigan's consumer sentiment index being released later in the morning in light of the Wal-Mart report. Economists expect the index rose to 85 in mid-May, which would be the highest reading since July, from 84.1 in April.

This has also been a remarkable week in the fixed income area where bond yields have fallen sharply amid equity market nervousness.

The benchmark U.S. 10-year Treasury bond was at 2.5 per cent, after starting the week at 2.66 per cent and as low as 2.47 per cent on Thursday.

And the rally hasn't been confined to the U.S.

In Canada, intraday yields on 10-year Government of Canada bonds touched 2.22 per cent Thursday after sitting as high as 2.4 per cent earlier in the week. On Friday, the 10-year stood at 2.265 per cent.

In earnings news, auto parts maker Martinrea International Inc. (TSX: T.MRE, Stock Forumreported quarterly net income of $16.7 million or 20 cents per share, down from $19.9 million or 24 cents per share in the same 2013 period. Revenue for the three months was up 12.4 per cent from $769.1 million in the same prior-year period and its shares gained 13 cents to $11.15.

And private equity firm Onex Corp. (TSX: T.OXC, Stock Forum) reported a first-quarter consolidated net profit of $99 million, up from a net loss of $271 million in the same quarter last year. Revenues were up three per cent to $6.5 billion from $6.325 billion year-over-year. Onex says it's increasing its quarterly dividend 33 per cent to five cents, up from 3.75 cents and its shares declined 34 cents to $63.01.

On the commodity markets, the TSX base metals sector led decliners, down 0.9 per cent, while July copper was up a penny at US$3.15 a pound.

The gold sector faded 0.85 per cent as June bullion edged $1.90 lower to US$1,291.70 an ounce.

June crude gained 15 cents to US$101.66 a barrel and the energy sector dropped 0.5 per cent.

There was also major merger and acquisition activity Friday morning as restaurant chain Red Lobster is to be sold to investment firm Golden Gate Capital for US$2.1 billion.


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