TSX slips after bad start to first quarter; gold tumbles

Source: Exec Digital Canada

Date :4/9/2008 1:46:15 AM

North American markets ended lower Tuesday after a disappointing start to first-quarter earnings in the United States and a tumble for gold.

Toronto's S&P/TSX composite index was relatively flat, slipping 17.48 points, or 0.13 percent, to 13,727.53 on losses across most major sectors.

The TSX gold index was the biggest decliner, down 1.7 percent, as bullion in New York tumbled $8.80 to US$918.

First quarter

Gavin Graham, chief investment officer at Guardian Group of Funds, said that, along with soft oil and gold prices, which are major drivers for the resource-heavy TSX, the "reminder that things are not great in the States" helped pull the Toronto index down.

"I think you got a bunch of really lousy first-quarter results out of the States, starting with Alcoa, so it's difficult to get too enthused when it's very obvious exactly how bad things are south of border," Mr. Graham said.

On the TSX, financials slid 0.7 percent as the big banks all lost value. CIBC was the biggest percentage decliner, down 90 cents (Canadian), or 1.31 percent, to $68.

Alcoa

Motivating stocks Alcoa Ltd., started the first-quarter earnings season by saying its profit fell 54 percent because of higher costs for raw materials and energy, along with the weaker U.S. dollar. The aluminum giant reported after markets closed Monday.

Market levels

Despite some analysts prophesying that Canadian markets could drop two to three per cent in the short term, Joe Ismail, technical analyst at Maison Placements Canada, said the decline is merely a "day of rest" for the TSX, which is hovering near its highest point since February.

"Normally when you have a good run, as we have witnessed over the past four weeks, you tend to pause a little bit," he said.

"I'd expect a bit of a retrenchment in the Canadian market rather than carrying on at these levels."

April 09, 2008