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The year-on-year inflation rate in the 18 countries sharing the euro slowed to 0.7 per cent in February from 0.8 per cent in January, the European Union’s statistics office Eurostat said. (Alex Domanski/Reuters)
The year-on-year inflation rate in the 18 countries sharing the euro slowed to 0.7 per cent in February from 0.8 per cent in January, the European Union’s statistics office Eurostat said. (Alex Domanski/Reuters)

At the open: TSX slides amid weak earnings, European growth data Add to ...

The Toronto stock market was lower Thursday amid data showing the economic recovery in the European Union proceeding at a slower than expected pace and weak earnings reports from Air Canada and retail giant Wal-Mart stores.

The S&P/TSX composite index dropped 25.27 points to 14,648.46.

The Canadian dollar was up 0.06 of a cent to 91.95 cents (U.S.).

U.S. indexes were in the red as the Dow Jones industrials declined 64.15 points to 16,549.82, the Nasdaq was down 9.73 points to 4,090.9 and the S&P 500 index slipped seven points to 1,881.53.

Air Canada posted a quarterly net loss of $341-million (Canadian), or $1.20 per diluted share, as it was impacted by a lower Canadian dollar. That compares with a net loss of $260-million, or 95 cents a year earlier. The airline says the net loss in the first quarter included foreign exchange losses of $161-million as the Canadian dollar fell about four per cent against the greenback. On an adjusted basis, the airline reported a net loss of $132-million, or 46 cents per diluted share, compared with a net loss of $143-million, or 52 cents per share, year-over-year. Its shares slipped two cents to $8.20.

Wal-Mart earned $3.59-billion, or $1.11 per share, for the period ended April 30, down from $3.78-billion, or $1.14 per share a year ago as bad winter weather kept shoppers away from its stores and pushed operating expenses higher than expected. Its performance missed Wall Street’s view, and the world’s biggest retailer gave a second-quarter earnings forecast below analysts’ estimates. Wal-Mart’s stock fell 2.8 per cent to $76.55 (U.S.).

Meanwhile, Eurostat, the EU’s statistics office, said the economy of the 18 countries that share the euro saw economic output grew by only 0.2 per cent in the first quarter from the previous three-month period. The modest rise came despite a better-than-expected 0.8 per cent advance in Germany and was below economists’ expectations for a 0.4 per cent increase.

A large chunk of the blame for the underperformance can be placed on a flat performance in France, Europe’s second largest economy behind Germany.

The figures are likely to strengthen arguments for the European Central Bank to cut interest rates and take further stimulus measure at its next meeting June 5.

Elsewhere on the corporate front, Scotiabank wants to sell some or all of its 37 per cent stake in asset manager CI Financial Corp. That position, acquired in 2008, is worth about $3.8-billion (Canadian) and the bank believes it can more profitably deploy the capital elsewhere. CI Financial shares fell $2.40 or 6.64 per cent to $33.73.

The gold sector led TSX decliners, down almost one per cent while June bullion dropped $9.10 to $1,296.80 (U.S.) an ounce.

The energy sector was ahead 0.42 per cent as June crude on the New York Mercantile Exchange fell 49 cents to $101.88 a barrel.

July copper was down a penny at $3.15 a pound and the base metals sector eased 0.55 per cent.

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