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Trader Michael Iozzi and specialist trader John Urbanowicz (R) at the New York Stock Exchange Wednesday. (BRENDAN MCDERMID/REUTERS)
Trader Michael Iozzi and specialist trader John Urbanowicz (R) at the New York Stock Exchange Wednesday. (BRENDAN MCDERMID/REUTERS)

At midday: TSX adds to losses, U.S. stocks turn negative Add to ...

The Toronto stock market was lower at midday, adding to a sharp loss in the previous session amid worries that central banks may withdraw efforts to help the global economic recovery.

The S&P/TSX composite index declined 58.43 points to 12,165.14 on top of a 159-point slide on Tuesday.

The Canadian dollar lost early momentum to move down 0.01 of a cent to 98.14 cents US.

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U.S. indexes erased early gains. The Dow shed an early triple-digit advance to move down 15.25 points to 15,106.77, the Nasdaq dropped 9.07 points to 3,427.88 and the S&P 500 index declined 2.36 points to 1,623.77.

The TSX tumbled Tuesday after Japan’s central bank failed to deliver expected measures to ease bond market volatility. Instead, the bank only upgraded its economic outlook.

There has also been concern about whether the U.S. Federal Reserve will ease its monetary stimulus. The Fed has been buying bonds to push down market interest rates, which has helped fuel a strong rally on U.S. markets since late last year.

Speculation that the Fed will begin to wind down its quantitative easing program has also had the effect of pushing U.S. Treasury yields sharply higher, which in turn has had a negative effect on TSX defensive sectors as well such as real estate, utilities, telecom and pipeline stocks.

The telecom sector led TSX decliners on Wednesday, down 1.45 per cent and BCE Inc. fell $1.06 to $44.04.

Utilities also pressured the Toronto market as Algonquin Power & Utilities shed 15 cents to $7.34.

Commodity prices were higher but the energy sector lost 0.71 per cent as the July crude contract on the New York Mercantile Exchange gained 52 cents to $95.90 a barrel. Canadian Natural Resources gave back 52 cents to C$29.01.

July copper was up two cents to $3.21 per pound after worries about Chinese growth helped send the metal down 17 cents over the past four sessions. Uncertainty about China’s recovery has weighed on markets following weekend data showing exports, retail sales and other indicators weaker than expected.

“They’re trying to move more to sustainable development, not at all costs,” observed Wes Mills, chief investment officer at Scotia Asset Management PM Advisor Services.

The TSX base metals sector slipped 0.26 per cent and Teck Resources shed 45 cents to C$24.31.

Cliffs Natural Resources Inc. says it is calling a temporary halt to its environmental assessment activities for a major chromite mine in the Ring of Fire region in remote northern Ontario. The company says the suspension is due to delays related to the environmental process, land surface rights and negotiations with the Ontario government about building infrastructure in the fly-in-only region. Its shares were up 22 cents to $17.72.

The gold sector was the leading advancer, up almost two per cent as August bullion on the Nymex gained $13.70 to US$1,390.70 an ounce. Barrick Gold Corp. improved by 51 cents to $20.50.

The rally on U.S. markets has bypassed the TSX, which has been depressed by a mining sector weighed down by falling commodity prices amid a weak global economic recovery. Gold miners have also been a major weight as lower inflation concerns have depressed gold stocks and bullion prices. Energy stocks have suffered because of demand concerns and worries about the future of major pipeline projects such as Keystone XL which would move greater amounts of oilsands crude to American markets.

“Until we get word on Keystone and some of these bottlenecks, Canada will suffer on that side.” added Mills.

“Really, if you look at the earnings growth by sector, energy and materials earnings growth is negative and that’s the whole story.”

The TSX is down around 200 points year to date and finished lower in seven of the past eight sessions.

In corporate news, Hudson’s Bay Co. lost $80.7-million in the latest quarter including discontinued operations, down from $129.7-million in the first quarter of 2012. Revenue rose by 4.2 per cent to $884-million. Hudson’s Bay stores in Canada had a 7.6 per cent same-store sales growth, offset by a 1.4 per cent decline at Lord & Taylor stores in the United States and its shares gained nine cents to $16.25.

Dollarama Inc. says the addition of 85 stores over the past year and strong growth at established locations helped push up revenue by 12 per cent to $448-million. The Montreal-based discount chain also reported profit of $45.6-million or 62 cents per share, which missed estimates of 67 cents and its shares fell $2.92 to $69.66.

European bourses turned lower as London’s FTSE 100 index moved down 0.63 per cent, Frankfurt’s DAX dipped 1.09 per cent while the Paris CAC 40 was down 0.38 per cent.

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