TSX falls on low gold

With the Syrian situation somewhat settled, investor attention has focused on next week’s two-day Fed meeting, where it’s expected the U.S. central bank will announce plans on winding down its $85-billion in monthly bond purchases.

The asset purchases are widely credited with holding down interest rates and breathing life into stock markets and there has been concern over how much and when the Fed will begin to taper the stimulus program.

U.S. indexes were lower, as the Dow Jones industrials fell 25.96 points to 15,300.64, after gaining more than 400 points over the previous three days. The S&P 500 contracted 5.71 points to 1,683.42, ending a seven-day positive streak. The Nasdaq dipped 9.04 points to 3,715.97.

“We’ve had an amazing 10 days now, basically since the end of August,” said John Tsagarelis, a portfolio manager at Manulife Asset Management. “We’ve had an aggressive run and everybody now is ready to cool their heels and wait for the Federal Reserve, see what they come up with next week.”

The Toronto stock exchange was in negative territory for most of the day, as the gold, materials and metal and mining sectors all posted steep declines. The gold sector was the leading decliner, losing 5.18 per cent, as shares in Barrick Gold fell more than five per cent, or $1.01 to $18.19. December bullion pulled back $33.20 to US$1,330.60 an ounce – its lowest price in nearly a month.

Tsagarelis said the losses in gold can be attributed to a large, unexplained sell-off early Thursday morning, coupled with the release of U.S. jobs figures.

The U.S. Labor Department reported the number of Americans seeking unemployment benefits plummeted last week by 31,000 to a seasonally adjusted 292,000. It said the drop was mostly due to technical issues in two states that delayed the processing of applications. The less volatile four-week average fell to 321,250, the lowest in six years.

On Friday, the U.S. Commerce Department will also release its retail sales data for August. Retail sales figures are an important economic indicator because they gauge discretionary spending.

On the TSX, the metals and mining sector was down 2.9 per cent, as Teck Resources (TSX:TCK.B) shares fell 3.53 per cent, or $1.04, to $28.43. December copper dipped five cents to US$3.21 a pound.

Meanwhile, the energy sector registered the smallest loss at 0.06 per cent, as the October crude contract rose $1.04 to US$108.60. Shares in Encana (TSX:ECA) surged nearly four per cent after the CEO of the oil company said its portfolio is far too big and has far too much weakly-priced natural gas in it, suggesting more asset sales are on the way. Its stock closed up 68 cents at C$18.61.

In other corporate news, Rogers Communications appointed the CEO of Vodafone U.K. to succeed its outgoing president and CEO. Guy Laurence, 52, will become top executive of Toronto-based Rogers (TSX:RCI.B) in December. He is replacing Nadir Mohamed, who had previously announced his intention to retire as CEO of the wireless, cable and media company. Rogers shares lost 1.15 per cent, or 50 cents, to $42.95.

Shares in athletic clothing retailer Lululemon Athletica Inc. (Nasdaq:LULU) dropped more than five per cent, or $3.73, to US$65.29 after the Vancouver company lowered its full-year outlook, and reported mixed earnings results. It said its second-quarter revenue of US$344.5 million was up 22 per cent from the same period last year.

Hudson’s Bay Co. (TSX:HBC) reported improved overall profit and sales from continuing operations in the second quarter but said its Lord & Taylor stores in the United States showed the lingering effects of weak market conditions. The earnings had little effect on the stock, which fell 0.01 per cent, or six cents, to $17.04.

Meanwhile, travel company Transat A.T. Inc. (TSX:TRZ.B) saw its stock soar nearly seven per cent, or 64 cents, to $9.98 after reporting record results for the third quarter on higher transatlantic selling prices, reduced capacity and cost-cutting initiatives.