Stocks were little changed in lacklustre mid-session activity, despite a continued sell off in shares of Research in Motion Ltd, as investors waited on the sidelines for news from the Federal Reserve's latest policy statement to be released today at 2:15 pm.
RIM shares, after initially rising more than 4 per cent in early trading, started heading south just after the company unveiled its long awaited Blackberry 10 smart phone. The success of the new phone, which has received good reviews, are critical for the company's efforts to compete with Apple and Samsung.
The TSX shares were off 8.5 per cent to $14.36 around the noon hour, adding to losses of about 10 per cent in the previous two sessions, as investors continued to take profits on RIM following the stock's doubling from lows last fall.
The company also announced a corporate name change to Blackberry, to match its main product, and a new stock ticker symbol of BB (BBRY on the Nasdaq).
Investors largely shrugged off 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 sharply higher because of hopes that the weak growth figure will lead the Fed to maintain its stimulatory, low interest rate monetary policy.
The TSX composite index traded near the flat line at midday, down 7 points to 12,823. Charging gold stocks were unable to offset losses in the industrial, telecommunications and consumer staples sectors and the decline in Research in Motion.
The price of the yellow metal surged $16.50 U.S. to $1,680 an ounce while silver rose 73 cents to $32.11. Among the best performing gold miners were Novagold Resources, up 5.9 per cent, B2Gold Corp., up 2.1 per cent and Osisko Mining, up 4.1 per cent.
In the United States, equities traded in a narrow range with marginal overall index changes. The Dow Jones industrial average lost 4 points to 13,950, while the S&P 500 fell less than 1 point to 1507 and the technology-focused Nasdaq rallied 5 points to 3,159.
Traders down played the significance of the decline in U.S. GDP, which was 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."
Turning to other movers on the Toronto market, software services provider CGI Group advanced 6.8 per cent after reporting quarterly bookings for new business that exceeded analyst expectations and earnings in line with estimates.
Natural gas producer Encana advanced 0.4 per cent. The price of natural gas rallied Wednesday morning by about 1 per cent following recent weakness due to warmer-than-expected winter weather and less demand for the fuel for heating.