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Melted gold flows out of a smelter into a mould at a plant of gold refiner in Istanbul February 27, 2009. (OSMAN ORSAL/REUTERS)
Melted gold flows out of a smelter into a mould at a plant of gold refiner in Istanbul February 27, 2009. (OSMAN ORSAL/REUTERS)

At midday: TSX falls as gold prices tumble Add to ...

North American markets headed lower Thursday amid a slew of earnings reports and corporate news in Canada and attention in the U.S. on next week’s Federal Reserve policy meeting.

The S&P/TSX composite index was down 90.21 points to 12,735.21. The Canadian dollar was up 0.06 of a cent to 96.89 cents US.

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The likelihood that the Fed will start to reduce its stimulus program has shaken markets in recent weeks after the U.S. central bank indicated it will start to wind down its $85-billion in monthly bond purchases on signs of an improved economy.

The asset purchases are widely credited with holding down interest rates and breathing life into stock markets, and the investment terrain will likely endure a shake-up if the Fed announces it will taper asset purchases, which could happen as early as next week.

The Dow Jones industrials dipped 21.16 points to 15,305.44, the Nasdaq was down 7.06 points to 3,717.93 and the S&P 500 retracted 3.99 points to 1,685.14.

“We’ve had an amazing 10 days now, basically since the end of August,” said John Tsagarelis, a portfolio manager at Manulife Asset Management. “We’ve had an aggressive run and everybody now is ready to cool their heels and wait for the Federal Reserve, see what they come up with next week.”

The Toronto stock exchange was pulled down early in the day amid steep declines in the gold, materials and metal and mining sectors. The gold sector was the leading decliner at 3.34 per cent, as shares in Barrick Gold fell more than three per cent, or 71 cents, to $18.49. December bullion fell $33.80 to $1,330 an ounce.

The fall in the gold price is being attributed to technical selling, the easing of geopolitical worries sparked by Syria, and the release of much-better-than-expected jobs figures from the U.S. this morning - which added to evidence that the Fed will soon begin its tapering program.

The U.S. Labor Department reported the number of Americans seeking unemployment benefits plummeted last week by 31,000 to a seasonally adjusted 292,000. It said the drop was mostly due to technical issues in two states that delayed the processing of applications. The less volatile four-week average fell to 321,250, the lowest in six years.

On the TSX, the metals and mining sector was down 1.75 per cent, as Teck Resources (TSX:TCK.B) saw its stock go down by 2.16 per cent or 93 cents to $28.54. December copper dipped five cents to $3.21 a pound.

Meanwhile, the energy sector was ahead at 0.36 per cent, as the October crude contract rose $1.02 to $108.58.

In corporate news, Rogers Communications said it has appointed the CEO of Vodafone U.K. to succeed its outgoing president and CEO. Guy Laurence, 52, will become top executive of Toronto-based Rogers (TSX:RCI.B) in December. He is replacing Nadir Mohamed, who had previously announced his intention to retire as CEO of the wireless, cable and media company. Rogers shares were up 0.078 per cent, or 34 cents, to $43.11 following the announcement.

Shares in athletic clothing retailer Lululemon Athletica Inc.. (NASDAQ:LULU) fell more than six per cent, or $4.55, to $64.47 after the Vancouver company lowered its full-year outlook, and reported mixed earnings results. It said its second-quarter revenue of $344.5-million was up 22 per cent from the same time last year.

Shares in travel company Transat A.T. Inc. (TSX:TRZ.B) rose more than 10 per cent, or $1.01 to $10.34 after reporting record results for the third quarter on higher transatlantic selling prices, reduced capacity and cost-cutting initiatives. The Montreal-based company’s net income attributable to shareholders exceeded expectations, more than quadrupling to $41.1-million from $9.4-million a year earlier.

In economic news, Statistics Canada said its new housing price index rose 0.2 per cent in July, following an identical increase the previous month. The agency says the combined metropolitan region of Toronto and Oshawa, as well as the Calgary region, were the top contributors to the increase. The largest local monthly price advance in July, 0.7 per cent, came in St John’s, N.L., where builders cited an increase in land development costs as the primary reason.

On Friday, the U.S. Commerce Department will release its retail sales data for August. Retail sales figures are an important economic indicator because it gauges discretionary spending.

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