TSX moves into the red for 2013

Written By Unknown on Minggu, 14 April 2013 | 22.39

The Toronto Stock Exchange lost more than 140 points today as fears about the world's largest economy sent commodity prices tumbling.

Canada's benchmark stock index shed more than one per cent of its value on Friday, closing at 12,337.59. Coupled with smaller declines in recent days, the TSX is now lower than where it was at the end of 2012 — 12,433 on Dec. 31.

The catalyst was a number of earnings disappointments from U.S. banks and a government data release that show retail sales fell by the largest amount in nine months last month.

Retail sales slumping

The Dow Jones industrials dipped 0.08 of a point to 14,865.06, the Nasdaq composite index declined 5.21 points to 3,294.95 while the S&P 500 index was down 4.52 points to 1,588.85.

U.S. retail sales for March were down 0.4 per cent. Economists had expected a flat reading following a 1.1 per cent rise in February.

The weak showing indicated that higher taxes and weak hiring have made consumers more cautious about spending.

An increase in social security taxes, which kicked in on Jan. 1, has lowered take-home pay this year for nearly all workers. Someone earning $50,000 has about $1,000 less to spend in 2013.

"I had been a little puzzled as to why the markets haven't been paying more attention to this story because it's a very big-dollar item," said Robert Gorman, chief portfolio strategist at TD Waterhouse.

"Increased payroll taxes [are] coming off the bottom line for most people, and they're having to make choices and so, things … that you can defer are being deferred."

That gloom sent commodity prices lower, because if the U.S. economy is slowing down, so will demand for raw materials like oil and metals.

Oil and gold lower

The loonie was caught up in the sell-off, losing a third of a cent to 98.64 cents US.

The TSX could face challenges getting positive momentum since it is so weighted in favour of energy and mining companies, two sectors that seem to be slowing down after multi-year runs.

Those sectors put in a weak showing Friday.

The gold sector led decliners as bullion fell $63.50 to $1,501.40 an ounce, sending gold down almost five per cent. Oil fell $2.22 to $91.29 a barrel.

With files from The Canadian Press

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