Stocks reversed early gains to trend moderately lower amid lacklustre U.S. economic data and corporate developments that led to sharp fluctuations in a number of major companies, including General Electic, Thomson Reuters and McDonalds.
The TSX composite index slipped 17 points or 0.1 per cent to 12,772, led by the materials and information technology sectors, as weakness continued in Blackberry maker Research in Motion and gold shares slumped after another drop in the price of the precious metal to $1,643 U.S. an ounce, down $9.
The Dow Jones industrial average closed at 13,983, down 36 point or 0.2 per cent, but remained near five year highs. The S&P 500 was little changed while the technology oriented Nasdaq advanced to 3,197, up 10 points or 0.3 per cent.
In economic news, U.S. retail sales in January rose 0.1 per cent, in line with expectations. The figure calmed some worries that new payroll taxes are dampening consumer sentiment, although some analysts cautioned that it may take several more months for a clearer picture to emerge on the impact of the new taxes on spending and the broader economy. Bonds in the U.S. sold off on the news, with the bellwether 10 year U.S.Treasuries falling in price, driving yields back above the psychologically important 2 per cent level.
The pull back indicates some investors may be cashing in some profits after stocks have run to near five year highs.
"I wouldn't be surprised if people are taking profits because the market has come up so much on really no evidence that anything is better today than it was last year or the year before," said Stephen Takacsy, portfolio manager at Lester Asset Management in Montreal. Mr. Takacsy has been taking a cautious stance and holding more cash recently because of worries that stocks are over valued.
One major worry is that retail investors have returned to the market, after holding back because of fears that stocks would crash again. "That's a very bearish sign because they're usually the last ones in," he said.
Turning to market movers in Toronto, Sterling Resources shares roared ahead to 84 cents, up 37 cents or 77 per cent, one of the session's largest percentage changes, after the company's largest shareholder, Vitol Group, announced an all cash takeover bid of 85 cents for the balance of the stock.
Orko Silver advanced to $2.60, up 46 cents or 21 per cent, after Coeur d'Alene Mines launched a competing takeover bid to an offer by First Majestic Silver Corp. News of the new bid lifted First Majestic stock to $18.17, up 18 cents or 1 per cent.
Thomson Reuters shares closed at $30.02, down 70 cents or 2.3 per cent, after the financial data provider issued a downbeat assessment for 2013, indicating revenue would rise in the low single digits. The weak revenue outlook suggests the company continues to be hampered by the slow recovery in trading activity at financial institutions.
RIM continued its recent pattern of alternating large gains and with losses, as the shares of the smart phone maker slid to $14, down $1.25 or 8.2 per cent.
In New York, shares of restaurant chain McDonald's fell after U.S. president Obama said he wanted to raise the minimum wage to $9 an hour from $7.25. The stock dropped to $94, off $1.10 or 1.2 per cent.
GE announced it was selling its remaining 49 per cent interest in NCB Universal to Comcast for more than $16-billion. GE shares rallied sharply to $23.40, up 82 cents or 3.6 per cent.
Iron ore producer Cliffs Natural Resources plunged to $29.29, off $7.33 or 20 per cent after it cut its dividend and said it would raise funds through new share issues, diluting existing holders.