TSX UNCHANGED AS U.S. MARKETS RECOVER
TORONTO • The Toronto stock market finished nearly flat Wednesday amid a report showing surging new-home sales in the U.S. but signs that the recovery in other economies may be weaker than anticipated.
The S&P/TSX composite index lost 5.13 points to 15,120.54. The Canadian dollar added US0.10¢ to US90.44¢.
Gareth Watson, vice-president of investment and research at Richardson GMP Ltd., said the overall pressure on markets may be the result of falling commodity prices and investors taking a larger view of the economy.
“We’re in a quiet period of the quarter,” he said. “Nothing is really coming out on the corporate front, so the focus of the market is broader, macro issues.”
Meanwhile, Wall Street made a sharp reversal after three days of declines. The Dow Jones industrial average added 154.19 points to 17,210.06, while Nasdaq rose 46.53 points to 4,555.22 and the S&P 500 index gained 15.53 points to 1,998.30.
The U.S. Commerce Department said sales of new homes climbed 18% last month to a seasonally adjusted annual rate of 504,000, much higher than the 450,000 analysts had expected.
Overseas, business confidence in Germany, Europe’s largest economy, dropped for the fifth consecutive month, continuing a slide that has been fuelled, among other things, by turmoil in Ukraine and sluggish overall growth in Europe. The Ifo institute says its confidence index dropped to 104.7 points for September from 106.3 last month.
On Tuesday, the latest purchasing managers’ index from China showed that manufacturing orders edged up to 50.5 this month from 50.2 in August — ahead of analysts’ expectations.
Along with the mixed readings on the global economies, there are heightened geopolitical risks. The U.S. and five Arab countries attacked the Islamic State of Iraq and Al-Sham group’s headquarters in eastern Syria in nighttime raids Tuesday using aircraft as well as Tomahawk cruise missiles launched from ships in the Red Sea and the northern Persian Gulf.
Mr. Watson said the attacks haven’t impacted equities as much as anticipated.
“Syria is a weird situation because, usually, any type of disruption in the Middle East would be interpreted as negative,” he said. “But the market isn’t too perturbed by bombs being dropped in Syria.”
On the corporate front, BlackBerry Ltd. has launched its latest smartphone, called the Passport, as part of a move the company hopes will solidify its reputation among business users. Shares in the Waterloo, Ont., company, which is expected to report its second-quarter financial results on Friday, fell 9¢ to $11.61.
On the commodity markets, the November crude contract on the New York Mercantile Exchange rose US$1.24 to US$92.80 a barrel.
December gold bullion declined US$2.40 to US$1,218.60 an ounce, with the gold sector on the TSX coming in as the day’s largest decliner, down 1.29%. December copper was up US2¢ at US$3.05 a pound, as metals and mining led advancers, rising 2.46%.