Skip to main content

The Globe and Mail

At midday: Gold stocks drag TSX lower as bullion dips

A trader studies a graph on a screen at the Moscow Interbank Currency Exchange (MICEX) in Moscow May 23, 2006.


Weakness in gold stocks sent the Toronto stock market lower on Thursday amid underwhelming data on the U.S. economy.

The S&P/TSX composite index was down 78.77 points to 14,380.34, after falling more than 100 points earlier in the session.

The TSX gold sector was the biggest decliner as the price of bullion for June delivery was down $2.50 at $1,288.40 (U.S.) an ounce.

Story continues below advertisement

On Wall Street, both the Dow and S&P briefly touched new intraday records before taking a turn negative.

The Dow Jones Industrials moved back 10.37 points to 16,562.63 while the Nasdaq dropped 14.66 points to 4,261.79. The S&P 500 index moved back 1.43 points to 1,889.47.

The move on the market came as report from the U.S. Labor Department indicated that hiring remains stable at levels seen before the recession. The number of people seeking unemployment benefits rose by 16,000 last week, to a seasonally adjusted 326,000.

Meanwhile, the Canadian dollar was up 0.1 of a cent at 90.72 cents (U.S.) after Statistics Canada reported a rebound in exports pushed the country's trade balance with the world to a surplus of $290-million in February from a deficit of $337-million in January.

Further insight into how the U.S. and Canadian economies are faring come Friday in the U.S. non-farm payrolls report and Canadian labour force survey.

In commodities, the price of oil remained below $100 a barrel with the May contract for light crude up eight cents at $99.70. May copper dropped 1.6 cents at $3.03 a pound.

Toronto's main stock index has risen nearly six per cent since the start of the year and sits near levels that haven't been seen since the summer of 2008. However, questions have persisted over whether the S&P/TSX Composite is headed toward a ceiling.

Story continues below advertisement

"I'm one of those guys that's very surprised how (well) the TSX did this first quarter," said Sadiq Adatia, chief investment officer of Sun Life Global Investment.

Considering the outlook for the economy, and the most recent slate of earnings, the fundamentals of Canada's main stock exchange don't hold up, Adatia said.

"It's just about a matter of time before we have a decent pullback in the TSX," he added.

"As more data comes out on the Canadian market we're going to realize the economy really is not that strong."

In corporate news, Fortis Inc., one of Canada's largest utility companies, received approval from U.S. regulators for its $4.3-billion purchase of UNS Energy Corp., an Arizona-based electricity and gas utility company. Fortis shares were down four cents to $31.44 (Canadian).

Shares of Hudson's Bay Co. were down 81 cents to $18.01 after it reported the acquisition of U.S. luxury retailer Saks helped sales increase nearly 75 per cent in the fourth quarter, while its profits dropped about 66 per cent, to $29.1-million from $86.8-million a year ago.

Story continues below advertisement

Meanwhile, the European Central Bank kept its key policy rate unchanged, saying that despite evidence the economy of the 18-country euro zone is weak and inflation is going down, interest rates will remain at 0.25 per cent.

European markets were mixed. London's FTSE 100 index gained 0.03 per cent, Frankfurt's DAX was up 0.18 per cent and the Paris CAC 40 rose 0.68 per cent.

In Asia, Tokyo's Nikkei 225 gained 0.84 per cent, Hong Kong's Hang Seng advanced 0.18 per cent and China's Shanghai Composite Index fell 0.74 per cent.

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at