Market Summary: Sept. 9, 2009

Banks, golds pull TSX lower; N.Y. up as Fed says economy stabilizing

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market broke a four-session winning streak Wednesday, pressured by bank stocks while gold stocks fell as bullion backed off from the US$1,000 an ounce level.

The S&P/TSX composite index closed down 105.13 points at 11,000.17, more than wiping out a 88-point gain Tuesday that took the TSX to its highest close this year.

The financial sector lost 1.73 per cent, continuing a deterioration in the sector since the major banks reported earnings last month.

"I think what you're seeing basically is just general profit-taking from some of these financials," said Eric Brass, equity analyst at MFC Global Investment Management.

"Some of these stocks are up over 100 per cent since their lows, so I think people are just taking their money off the table to a degree."
The Canadian dollar moved lower following three days of gains which pushed the loonie more than two U.S. cents higher, moving down 0.13 of a cent to 92.51 cents U.S.

The US dollar fell against other major currencies and gold — which is typically bought as a safe haven asset — at times topped $1,000 an ounce before settling just short of that mark.

Tom Phillips, president of TS Phillips Investments in Oklahoma City, said investors are buying gold because they are nervous about the economy and rising deficits but don't want to miss more gains in the stock market. The S&P 500 index has jumped 50 percent from a 12-year low in early March.

Oil prices pushed higher for a second straight day Wednesday on continued weakening of the U.S. dollar and as investors awaited the outcome of an OPEC meeting that is expected to result in no change in production levels. Benchmark crude for October delivery climbed $1.15 to US$72.25 a barrel on the New York Mercantile Exchange.

The latest move up comes a day before the Bank of Canada makes its scheduled announcement on interest rates.

The central bank is widely expected to leave rates unchanged at 0.25 per cent, but is expected to address the sharply appreciating currency, following up previous comments that the high loonie could derail an economic recovery.