The TSX opened lower, as the materials sector was under significant pressure from hefty losses in gold and copper prices this morning. U.S. indexes were slightly negative.
In early trading, the S&P/TSX composite index was down 48 points, or 0.4 per cent, at 12,304; the S&P 500 was down just over 1 point, or 0.1 per cent, at 1,426; and the Dow Jones industrial average was down 11 points, or 0.08 per cent, at 13,234.
The February gold futures contract in New York was down $24.40, or 1.4 per cent, at $1,693.20 (U.S.) an ounce. Copper, meanwhile, was down 1.4 per cent at $3.66 (U.S.) per pound. The materials component of the TSX was down nearly 2 per cent.
Gold came under heavy selling pressure in Asia overnight, but it didn't appear to be tied much to fundamentals. Rather, bullion saw technical selling as it fell below the $1,700 level, and the triggering of sell stops, which are pre-placed market orders to sell if a certain price is hit, accelerated the move, according to traders.
The U.S. Federal Reserve's expanded monetary stimulus program announced Wednesday would seem to be positive for gold, given it keeps inflationary concerns alive. But the Fed's actions were largely expected and may have already been factored into the market.
Bullion and equity markets initially rose on Wednesday after the Fed said it would buy $45-billion of Treasuries per month starting in January and keep key interest rates exceptionally low as long as the unemployment rate remained above 6.5 per cent. But enthusiasm was dimmed after Chairman Ben Bernanke cautioned in a press conference that monetary policy can only go so far in counteracting the effects of the automatic tax increases and spending cuts set to take hold at the end of this year should Washington not a agree on a budget.
Another concern for markets: that drop in the unemployment rate to 6.5 per cent could come sooner than many expect. Such a scenario would ignite forward increases in borrowing costs even as the economy is still in recovery mode.
A bunch of economic reports this morning were largely supportive for markets. U.S. retail sales rose 0.3 per cent in November, rebounding from a 0.3 per cent decline in October, though that was largely expected. A separate report showing that the number of Americans filing new claims for unemployment fell 29,000 last week to a seasonally adjusted 343,000 was a better reading than economists had forecast. But those numbers are usually pretty volatile this time of year.
Investors are largely shrugging off some positive news out of Europe this morning, where finance ministers had reached agreement to grant the European Central Bank greater regulatory powers over the euro zone's biggest banks. Euro-area finance ministers also approved the release of the next aid payment to Greece today, with money expected to start flowing as soon as next week.
Here's a look at some of the stocks moving on early news:
Best Buy Co. shares are up about 17 per cent after the Minneapolis Star Tribune reported that founder Richard Schulze will renew efforts to purchase the big-box retailer this week with an offer said to be at least $5-billion.
Sprint Nextel Corp. said it is offering $2.1-billion (U.S.) to buy the rest of wireless internet provider Clearwire to get full ownership of its wireless spectrum. Clearwire shares are up 11 per cent.
CVS Caremark Corp. said that its board approved a 38 per cent increase in the quarterly dividend as it laid out its expectations for higher earnings next year. Shares are up 3 per cent.