The corner of Bay Street and Adelaide streets in the heart of Toronto’s financial districtGloria Nieto/The Globe and Mail
Canadian stocks fell for the second time in three days as Open Text Corp. tumbled on worse-than-estimated earnings and data showed the U.S. economy stalled in the first quarter.
Open Text plunged 5.3 per cent as third-quarter sales were hampered by currency effects. Valeant Pharmaceuticals International Inc. rise 1.7 per cent after the drugmaker said its chief financial officer was leaving. Suncor Energy Inc. slipped 1 per cent as energy shares declined for a fourth day.
The Standard & Poor's/TSX Composite Index fell 41.24 points, or 0.3 per cent, to 15,304.83 in Toronto. The benchmark Canadian equity gauge is up 2.3 per cent in April.
Open Text sank 5.3 per cent, the biggest loss since October 2013, as technology shares slumped 2.4 per cent as a group. Nine of 10 industries in the S&P/TSX retreated on trading volume 10 percent lower than the 30-day average at this time of the day.
Royal Bank of Canada slipped 0.3 per cent and Toronto- Dominion Bank lost 0.5 per cent as the S&P/TSX Banks Index snapped a four-day advance.
Enbridge Inc. lost 1.5 per cent and TransCanada Corp. retreated 1.4 per cent. Crude inventories probably increased by 3.3 million barrels last week, according to a Bloomberg survey of analysts ahead of an Energy Information Administration report Wednesday.
Bombardier Inc. climbed 1.7 per cent. Chinese locomotive makers CSR Corp. and China CNR Corp. are considering an acquisition of a controlling stake in Bombardier's train business, said a person familiar with the matter.
U.S. stocks slipped on Wednesday after data showed that economic growth braked more sharply than expected in the first quarter, and ahead of the U.S. Federal Reserve's likely decision to maintain historically low interest rates.
U.S. gross domestic product grew just 0.2 per cent at an annual rate in the quarter as harsh weather put off shoppers and energy companies cut spending.
The reading was the weakest in a year and lower than the 1.0-per-cent rate forecast by economists polled by Reuters.
Investors will closely examine the Fed's statement for clues on when rates are likely to be increased, as a batch of soft data could push back the timing of a hike until the end of the year. The statement is expected at 2 p.m. EDT.
"I think the GDP data has to be taken with a grain of salt," said Chris Bertelsen, chief investment officer at Global Financial Private Capital in Sarasota, Florida, which oversees $4.5 billion in funds.
"We saw this movie last year where the first quarter was weak but followed up with a stronger second and third quarters and you're going to see the same pattern this year too."
In contrast to the weak GDP numbers, other data showed that contracts to buy previously owned U.S. homes rose in March to their highest level since 2013.
The Dow Jones industrial average was down 76.64 points, or 0.42 per cent, at 18,033.5, the S&P 500 was down 9.49 points, or 0.45 per cent, at 2,105.27 and the Nasdaq Composite was down 27.47 points, or 0.54 per cent, at 5,027.95.
Earnings released on Wednesday painted a mixed picture.
"Corporate America is very, very busy trying to create earnings that justify the current pricing of the market," said Dave Heidel, regional investment manager at U.S. Bank Wealth Management in Minneapolis, which oversees $128-billion.
Heidel said the consequence of companies cutting costs to boost earnings reflects in the poor GDP numbers, which were partly due to low corporate spending.
Twitter dove 5.5 per cent to $39.90, a day after the company cut its full-year forecast due to weak demand for its new direct response advertising.
MasterCard rose 2.6 per cent to $92.63 after reporting a better-than-expected profit. The results also pushed up Visa 1.7 per cent to $67.95, making it the biggest gainer among stocks in the Dow Jones Industrial Average.
Lumber Liquidators slumped as much as 21 percent to a three-year low of $26.54 after the hardwood flooring retailer said the Department of Justice is seeking criminal charges related to its imports from China.
Starwood Hotels rose 8.7 per cent to touch a record high of $87.80 after it said it was exploring strategic and financial alternatives.
With files from Reuters