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Mobilicity chairman John Bitove. The wireless upstart has scoured the globe to find a buyer, contacting ‘more than 30’ potential purchasers, according to court documents filed as part of the company’s restructuring. But the Vaughan, Ont.-based carrier has yet to clinch a binding sale agreement. And time is running out for it to do so. (Peter Power/The Globe and Mail)
Mobilicity chairman John Bitove. The wireless upstart has scoured the globe to find a buyer, contacting ‘more than 30’ potential purchasers, according to court documents filed as part of the company’s restructuring. But the Vaughan, Ont.-based carrier has yet to clinch a binding sale agreement. And time is running out for it to do so. (Peter Power/The Globe and Mail)

At the open: TSX sinks with telecom, industrial sectors Add to ...

The Toronto stock market was lower Wednesday amid doubts about efforts to revive Japan’s economy while traders looked to economic reports that may offer a clue about how long the Fed will continue with its economic stimulus plans.

The S&P/TSX composite index fell 92.37 points to 12,501.6 with declines spread across most sectors.

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The Canadian dollar shed early gains, down 0.07 of a cent to 96.6 cents U.S. amid a strong housing report.

Statistics Canada says municipalities issued $7-billion worth of building permits in April, up 10.5 per cent from March and far better than the month-to-month decline that analysts had expected.

U.S. indexes were lower as traders took in disappointing job creation data. Payroll firm ADP reported Wednesday that the U.S. private sector cranked out 135,000 jobs during May, less than the 165,000 that had been expected.

The ADP report comes two days before the release of the U.S. government’s official employment data for last month.

The Dow Jones Industrials declined 71.15 points to 15,106.39, the Nasdaq fell 16.33 points to 3,428.93 while the S&P 500 index was down 8.91 points to 1,622.47.

Traders also took in the latest reading of the health of the U.S. non-manufacturing sector, which showed stronger expansion. The Institute for Supply Management’s index came in at 53.7, better than the 53 reading that had been expected and up from 53.1 in April. But the data also showed that hiring slowed further in May to the lowest level since July 2013, coming in at 50.1.

And at mid-afternoon, the U.S. Federal Reserve releases its latest regional economic survey.

Traders hope the data will help investors try and work out when the U.S. Federal Reserve may start reducing the amount of government bonds it has been buying in the markets as part of its stimulus program.

On Tuesday, Esther George, a policymaker at the Fed, indicated she supported slowing the pace of the bond purchases “as an appropriate next step.”

The Fed’s monetary stimulus program, involving spending $85-billion a month on bond purchases, has been a huge support to stock markets over the past few years. The purchases are designed to keep interest rates low and giving the U.S. economy a lift.

Meanwhile, investors appeared unimpressed with a speech by Japanese prime minister Shinzo Abe, who outlined how he proposes to rejuvenate the country’s economy. Among other things, Abe pledged to raise Japanese incomes by three per cent a year to protect consumers’ purchasing power if the government meets its target of boosting inflation to two per cent within two years. However, his speech was short on details and Tokyo’s benchmark Nikkei index fell 3.8 per cent.

The index had gained over 70 per cent since November on expectations that Abe’s policies would boost growth and corporate profits, but has lost nearly 20 per cent in the past few weeks on growing uncertainty over how well the plans are working.

The telecom sector led declines, down 1.33 per cent, a day after Industry Minister Christian Paradis said Mobilicity and other new wireless carriers won’t be allowed to sell spectrum to big carriers. The move was a setback for Telus which had asked permission to acquire Mobilicity and its spectrum. Telus shares shed 75 cents to $35.06.

The Industrials sector dropped 1.25 per cent with Canadian Pacific shares down $3.39 or 2.57 per cent to $128.37.

CP stock fell almost three per cent Tuesday after Bill Ackman’s Pershing Square Capital Management, the railway’s biggest shareholder, said that it plans to sell about a third of its holding over the next six to 12 months.

Financials also weighed, down almost one per cent with TD Bank down 96 cents to $83.06.

Laurentian Bank climbed 17 cents to $44.22 as it said it is boosting its quarterly dividend by a penny to 50 cents a share as its second-quarter profit increased four per cent to $35.1-million.

Resource stocks were also weak with the energy sector off 0.55 per cent as July crude on the New York Mercantile Exchange gained 37 cents to $93.68 (U.S.) a barrel. Cenovus Energy gave back 37 cents to $30.94.

The base metals sector was down 0.45 per cent while July copper added two cents to US$3.39 a pound. Teck Resources dropped 38 cents to $27.44.

The gold sector led advances, up 1.5 per cent with August bullion up $7.90 $1,405.10 (U.S.) an ounce. Barrick Gold Corp. improved by 55 cents to $22.13.

European bourses were negative as London’s FTSE 100 lost 1.48 per cent, Frankfurt’s DAX was down 0.71 per cent while the Paris CAC 40 gave back 1.4 per cent.

In corporate news, Penn West Petroleum Ltd. says it will be cutting its quarterly dividend by half, slashing 10 per cent of its staff and undertake a strategic review of the company with a new president and chief executive officer in place. The Calgary-based company says a former senior executive from Marathon Oil, David Roberts, will become the new CEO and president on June 19 and the current CEO, Murray Nunns, will retire on July 1. Its shares added 12 cents to $11.02.

The U.S. government is taking advantage of the recent run-up in General Motors stock to sell off another 30 million shares in the auto giant that it acquired in a bailout. The Treasury Department said Wednesday that it will sell the shares, plus another 20 million owned by a United Auto Workers retiree health care trust, in a public offering after the market closes Thursday. GM shares hit $35.49 (U.S.) Tuesday, the highest point since December, 2010 and were down 21 cents to $34.74 Wednesday.

 
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