Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

Inside the Market

Up-to-the-minute insights
on developing market news

Entry archive:

Research In Motion CEO Thorsten Heins displays features of the Blackberry 10 during the Blackberry Jam Americas in San Jose in this file photo taken Sept. 25, 2012. (Robert Galbraith/Reuters)

Research In Motion CEO Thorsten Heins displays features of the Blackberry 10 during the Blackberry Jam Americas in San Jose in this file photo taken Sept. 25, 2012.

(Robert Galbraith/Reuters)

The close: RIM shares pounded as BB10 fails to excite investors Add to ...

The debut of Research in Motion’s new smart phone failed to excite investors, who pounded shares of the Canadian high technology company to a double-digit loss, while the U.S. Federal Reserve Board, as expected, left unchanged its low interest rate policy.

A late session stumble pushed North American stocks modestly into the red on Wednesday, in a volatile session for RIM, which initially rose more than 4 per cent in early trading only to fall as the company unveiled its highly anticipated new Blackberry 10 phone.

More Related to this Story

The shares sagged 11.8 per cent to close at $13.86 in heavy trading in Toronto, adding to losses of about 10 per cent on Monday and Tuesday as investors took profits following a run up in the shares before the new product announcement. Some investors have also worried that the new phone may not have arrived early enough for the embattled company to regain market share from Apple and Samsung.

RIM also announced a corporate name change to BlackBerry, to match its main product, and a new stock ticker symbol of BB in Toronto (BBRY on the Nasdaq).

Investors also had to digest the report of an unexpected 0.1 per cent contraction in U.S. GDP in the fourth quarter, the first drop in 3 1/2 years, although gold moved higher because of hopes that the weak growth figure will encourage the Fed to maintain its stimulatory, low interest rate monetary policy.

The TSX composite index fell 36 points to 12,794, with weakness in the industrial, telecommunications and consumer staples sectors.

The price of the yellow metal rallied $12.70 U.S. to $1,677 an ounce while silver rose 67 cents to $32.05. Among the best performing gold stocks were Novagold Resources, up 5.9 per cent, and Osisko Mining, up 3.8 per cent.

In the U.S., equities trended lower in afternoon trading from unchanged levels around midday. The Dow Jones industrial average lost 44 points to 13,910, while the S&P 500 fell 5.8 points to 1502 and the technology-focused Nasdaq dropped 11.4 points points to 3,142.

Traders down played the significance of the decline in U.S. GDP, led by a sharp fall in defence spending and inventory changes, large one-time changes that masked continued gains in consumer spending and residential investment.

The drop “isn’t the start of a new recession,” said Capital Economics in a note. “First-quarter GDP growth is going to be pretty weak because of the expiry of the payroll tax cut, but there is nothing in this report to change our view that growth will accelerate as this year goes on.”

The Federal Reserve, in its regular interest rate policy statement released Wednesday afternoon, said it would continue its highly accommodative monetary policy until unemployment drops substantially or inflation picks up. Traders had expected no change in direction from the central bank, although the market decline picked up steam after the release of the statement.

Turning to other movers on the Toronto market, software services provider CGI Group surged 8.3 per cent after reporting quarterly bookings for new business that exceeded analyst expectations and earnings in line with estimates.

Natural gas producer Encana advanced 0.6 per cent. The price of natural gas rallied Wednesday and traded 2.4 per cent higher late in the session on hopes for colder winter weather in regions that use the fuel.

Meanwhile in New York, shares of the No. 2 U.S. gas producer Chesapeake Energy, soared 6 per cent after its CEO said he was leaving because of differences with the company’s board.

After markets closed, Facebook released earnings that seemed to beat analysts’ expectations - but the stock fell more than 3 per cent in post market trading.

For Globe Unlimited Subscribers

Business videos »

Most popular videos »

Highlights

Most Popular Stories