Federal Reserve chair Janet Yellen has carefully conditioned market participants to follow economic indicators just as the Fed does.Susan Walsh/The Associated Press
The Toronto stock market lost ground Wednesday morning despite a strong earnings report from grocer Metro Inc. while traders await the mid-afternoon release of minutes from a recent U.S. Federal Reserve meeting on interest rates.
The S&P/TSX composite index slid 25.89 points, or 0.17 per cent, to 14,947.08.
The Canadian dollar fell 0.37 of a cent to 88.19 cents (U.S.).
U.S. indexes were weak with the Dow Jones industrials down 44.89 points, or 0.25 per cent, to 17,642.93, the Nasdaq lost 31.71 points, or 0.67 per cent, to 4,670.73 and the S&P 500 index declined 8.43 points, or 0.41 per cent, to 2,043.37.
Investors will be looking to the contents of the minutes to for hints about when the Fed might start hiking rates from near zero, where they have been since the 2008 financial crisis. Markets generally expect the Fed to move around the middle of 2015.
The Fed has already started to remove some of the massive stimulus that was in place to help the economy recover from the 2008 financial crisis. At the last meeting, it voted to end its latest quantitative easing program involving bond purchases at the end of October.
In earnings news, grocer Metro Inc. had a $115.6-million (Canadian) profit in the fourth quarter of its 2014 financial year, or $1.32 per share, which was above analyst estimates of $1.29 share. Its revenue in the fourth quarter was up 3.9 per cent from a year earlier, rising to $2.7-billion, while Metro's same-store sales were up 3.1 per cent and its shares gained $2.15 to $84.65.
Utilities and consumer discretionary stocks also supported the TSX.
The Toronto market was held back by the resource sectors with the energy sector down 0.3 per cent while crude continued to be stuck around the $75 (U.S.) a barrel level with the December contract off one cent to $74.60.
The base metals group was flat while December copper gained four cents to $3.04.
The gold sector was down 0.65 per cent, giving back some of Tuesday's five per cent jump while December bullion dipped 40 cents to $1,196.70 an ounce.
Pipeline company TransCanada was also be in focus a day after the U.S. Senate rejected a proposal to fast-track the approval of its controversial Keystone XL pipeline. Pipeline supporters needed 60 votes in the Senate to move the bill forward, but the motion fell short with a margin of 59-41.
TransCanada is holding its annual investor day in Toronto, where Russ Girling, TransCanada's president and chief executive officer is expected to talk about Keystone, along with its outlook for its natural gas pipelines, liquids pipelines and energy businesses.
Girlin also said in a statement Wednesday that he expects TransCanada's common share dividend to grow at an average annual rate of at least eight per cent through 2017. He added that "success in advancing our major projects could lead to an annual dividend growth rate of ten per cent or more." TransCanada gained $1.13 to $57.13 (Canadian).
Elsewhere, Cliffs Natural Resources Inc. shares plunged 15 per cent to $8.62 (U.S.) after the mining company said it may close the Bloom Lake mine near Fermont, Que. at a cost of up to $700-million, and exit its iron ore operations in Eastern Canada. Cliffs Natural says investors are still interested in Bloom Lake – which requires a $1.2-billion expansion – but not within a time frame that's acceptable to the company. The word from the Cleveland-based company comes as iron ore prices have hit a five year low approaching $70 a dry ton amid too much supply and lower demand from China.