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Traders work on the floor at the New York Stock Exchange, June 19, 2013.


The Toronto stock market was lower Wednesday as traders hoped that the U.S. Federal Reserve will shed some light on what it intends to do about curbing some of its economic stimulus.

The S&P/TSX composite index index declined 30.2 points to 12,337.26 ahead of the end of the Fed's two-day meeting on interest rates and an announcement at 2 p.m. (ET). This will be followed by a news conference with Fed chairman Ben Bernanke at 2:30 p.m.

The Canadian dollar was ahead 0.18 of a cent to 98.12 cents US U.S. indexes were also weak as the Dow industrials dipped 14.63 points to 15,303.6, the Nasdaq was down 1.96 points to 3,480.23 while the S&P 500 index slipped 1.43 points to 1,650.38.

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A cloud of uncertainty settled over markets after Bernanke first mentioned the possibility of tapering the Fed's monthly purchases of $85-billion of bonds during congressional testimony on May 22. Analysts don't expect the Fed to make a move on tapering just yet. But uncertainty over whether the Fed feels economic conditions are appropriate for such easing, along with questions about how much the bank might cut back, has resulted in volatility where daily, triple-digit moves have become almost routine.

The bond purchases, the third round of quantitative easing embarked on by the Fed in the wake of the 2008 financial collapse and subsequent recession, have kept interest rates and bond yields low. They have also helped keep a strong rally on most stock markets going for all this year.

But analysts wondered if some traders had unrealistic expectations for the amount of clarity that the Fed could realistically offer.

"There's been so much noise about this meeting and yet nothing has really changed at all since the last meeting so why should their message change that much?, said Gareth Watson, vice president Investment Management and Research at Richardson GMP Ltd., adding that some market players seem mixed up about what sort of stimulus the Fed may be thinking about curbing.

"My frustration is that some people are kind of linking tapering to interest rates going higher. Which are two completely different things. (They think that) if we're tapering now, then interest rate increases must be just around the corner."

In fact, the Fed has committed itself to not raising rates from near zero until the jobless rate gets down to 6.5 per cent from its current level of 7.6 per cent.

The telecom sector was off 0.85 per cent with Telus Corp. down 46 cents to $34.98.

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The tech component fell 0.9 per cent with BlackBerry down 50 cents to $14.63. The stock had risen about three per cent Tuesday after RBC Dominion Securities boosted its outlook for the company, predicting a profit this fiscal year instead of a loss thanks to stronger-than-expected shipments of its new BlackBerry 10 devices.

But the stock slid Wednesday after Bernstein Research lowered its rating to "underperform" from "market perform." Analyst Pierre Ferragu said his own channel checks at carriers show that consumer appetite for the new BlackBerry 10 smartphones is weakening, and he thinks the company will miss analyst expectations for the second half of this year.

The July crude contract on the New York Mercantile Exchange lost 27 cents to $98.17 and the energy sector dipped 0.12 per cent.

Statoil says it is evaluating a new discovery of high-quality oil about 500 kilometres northeast of St. John's, N.L. The Harpoon discovery is about 10 kilometres from the Mizzen discovery, which is estimated to hold between 100 million and 200 million barrels of oil. Statoil has a 65 per cent interest in the Harpoon discovery and the remaining 35 per cent is owned by Calgary-based Husky Energy. Husky shares were ahead 22 cents to $28.55.

Commodity prices were mixed with the July copper was three cents lower to US$3.13 a pound. The base metals group was off 0.2 per cent and HudBay Minerals fell 13 cents to $7.61.

The consumer staples sector was slightly lower with convenience store chain Alimentation Couche-Tard down 14 cents to $62.14. The stock has soared more than eight per cent over the past week on speculation the company could buy the retail operations of oil and gas giant Hess, which owns about 1,350 gasoline stations in 16 East Coast states. Couche-Tard recently said it has the capacity to spend $1.5-billion on acquisitions. Hess announced in May that it will exit its retail, energy marketing and energy trading businesses following pressure from its third-largest shareholder – activist investor Elliott Management – to break up the firm.

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The gold sector was flat while August bullion rose $6.60 to $1,373.50 an ounce. Kinross Gold Corp. faded six cents to $5.80.

Elsewhere on the corporate front, Valeant Pharmaceuticals International, Inc. has priced its previously announced public offering of shares aimed at helping finance the $8.7-billion acquisition of eye care company Bausch + Lomb. Valeant will issue slightly more than 23.5 million common shares at a price of $85 per share, for aggregate gross proceeds of some $2-billion. Valeant shares rose 39 cents to $88.13.

Shipping giant FedEx posted quarterly earnings of $2.13 a share ex-items, handily beating estimates of $1.96. Revenues came in at $11.4-billion, missing estimates of $11.44-billion and its shares were ahead 3.68 per cent to $103.14.

European bourses were lower with London's FTSE 100 index down 0.35 per cent, Frankfurt's DAX dropped 0.18 per cent and the Paris CAC 40 declined 0.42 per cent.

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