Toronto loses ground on weak retail sales

The Toronto stock market was lower Wednesday as weak corporate performances and retail sales data reminded traders of the fragile state of the economic recovery.

The S&P/TSX Composite index dropped 65.15 points to approach noon at 12,051.77.

The Canadian dollar weakened 0.42 cents to 100.70 cents U.S.

Resource stocks led the TSX lower after mining giant BHP Billiton reported that its annual profit plunged 34.8% from a year ago to $15.4 billion U.S. as a slowdown in global economic growth led to weaker prices for its key commodities. Revenue for the year was up 0.7% to $72.2 billion.

The metals and mining sector moved down as copper gave back some of Tuesday's eight-cent run-up, down a penny to $3.45 U.S. a pound. Teck Resources shed 27 cents to $29.65.

The energy sector was off as Suncor Energy pulled back 20 cents to $31.99.

Financials were also weak as Royal Bank eased 28 cents to $53.77.

The gold sector was the leading advancer as Barrick Gold Corp. rose 29 cents to $36.77.

In corporate news, dozens of independent merchants who operate 164 Rona stores across Canada have written to the head of Lowe's Companies, saying they are opposed to a takeover of Quebec-based Rona Inc. The letter, made public Wednesday, says the independents prefer Rona's approach of combining a network of independents with more than 200 corporate stores. Rona shares were down 13 cents to $12.99.

CAE says it has won a series of military contracts valued at more than $55 million. They include a contract from Airbus Military to develop a full-flight simulator for the Royal Air Force of Oman and a contract to provide maintenance and support services for the Indian Air Force's Hawk training devices. CAE shares inched up a penny to $10.17.

On the economic ledger, Statistics Canada told us this morning that retail sales eased 0.4% in June, more than offsetting a gain in May. Lower sales were reported in seven of 11 sub-sectors, representing 64% of retail trade.

ON BAYSTREET

The TSX Venture Exchange poked ahead 0.35 points to 1,239.67. The Nasdaq Canada dipped 2.18 points to 347.60.

All but three of the 14 Toronto subgroups were lower by midday, weighed down mostly by metals and mining, off 1.2%, energy, down 1%, and industrials, sinking 0.6%.

The three gainers were health-care and information technology, each up 0.1%, while utilities just scraped above breakeven.

ON WALLSTREET

U.S. stocks fell slightly Wednesday, easing further from the four-year highs reached a day earlier, as investors await the latest minutes from the Federal Reserve meeting and developments out of Europe.

The Dow Jones industrial average fell 58.09 points to break for lunch at 13,145.59

The S&P 500 index waned 3.7 points to 1,409.47, while the tech-heavy Nasdaq Composite Index dunked 3.51 points to 3,063.75.

Shares of Toll Brothers rose after the luxury home builder reported surprisingly strong earnings, signaling further momentum in the U.S. housing market.

Express posted earnings that beating analyst expectations, but net sales fell short of forecasts, sending shares of the apparel retailer lower.

Shares of Williams Sonoma surged after the housewares retailer reported better-than-expected second-quarter earnings and raised its forecast for the rest of the year.

American Eagle delivered earnings that were in line with expectations, but the company's forecast for the full year topped Wall Street's forecast.

Dell reported its quarterly results after the closing bell Tuesday. The company posted earnings that beat expectations, but shares slumped on disappointing guidance.

Rival Hewlett-Packard is on tap to report after Wednesday's close.

Investors continue to keep an eye on Greece as Prime Minister Antonis Samaras meets with euro-zone officials throughout the week. He is expected to push for a two-year extension of the country's bailout program, which would give the government more time to implement difficult reforms and help get the nation's economy back on track.

Analysts say markets will be looking for any comments out of Samaras' meetings for signs of further stimulus measures.

Back in the States, investors will spend Wednesday poring over the minutes of the latest Federal Reserve meeting, while also digesting a report on existing home sales and the latest round of corporate earnings.

The Fed will release the minutes of its July meeting at 2 p.m. ET.

While the central bank didn't announce any further stimulus measures at its last meeting, investors will look for clues about whether a new round of quantitative easing could be coming when chairman Ben Bernanke speaks at the Jackson Hole, Wyo., symposium at the end of the month.

On matters economic, existing home sales came in at an annual rate of 4.47 million in July, up from June's 4.37 million, according to the National Association of Realtors. The results were below an economists' consensus compiled by Briefing.com.

The price on the benchmark 10-year U.S. Treasury gained, pushing the yield down to 1.74% from Tuesday's 1.81%.
Treasury prices and yields move in opposite directions.

Oil for September delivery gained 37 cents to $97.21 U.S. a barrel.

Gold futures for December delivery added $1 to $1,643.90 U.S. an ounce.