TSX declines as subpar retail sales data add to economic concerns

TORONTO — 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 moved down 47.3 points to 12,069.62 and the TSX Venture Exchange climbed 1.69 points to 1,241.02.The Canadian dollar fell 0.25 of a cent to 100.79 US cents amid a big miss on retail sales for June.Statistics Canada reported that retail sales fell 0.4%, against expectations of a 0.1% rise.Markets in New York also backtracked after a report from the U.S. real-estate industry showed of sales of previously owned homes increased last month but less than anticipated.The Dow Jones industrials was down 57.44 points to 13,146.14. The Nasdaq gave back 5.97 points to 3,061.2 and the S&P 500 index declined 4.35 points to 1,408.82.The U.S. National Association of Realtors said home resale volume rose to a seasonally adjusted annual rate of 4.47 million in July, a 2.3% increase from the previous month’s rate.The annual sales pace remains below the roughly 5.5 million that economists consider healthy and slightly less than the 4.52 million that economists expected in JulyThe median price of existing U.S. homes climbed 9.4% year-over-year to US$187,300.“The housing market in the U.S., which is core to banking and core to the consumer in terms of the wealth side, continues to trickle ahead,” said Chris King, portfolio manager at Morgan, Meighen and Associates.“Not big leaps and big turnarounds (but) it is ticking along in the right direction.”Resource stocks led the TSX lower as mining giant BHP Billiton reported that its annual profit plunged 34.8% from a year ago to US$15.4 billion as a slowdown in global economic growth led to weaker prices for its key commodities.BHP’s revenue for the year was up 0.7% to $72.2-billion.In addition, Chinese car maker Geely Automobile Holdings Ltd. said first-half profit was flat and trading conditions in the world’s biggest auto market in the second half of 2012 “are expected to be more challenging.”Adding to signs of a global slowdown in growth, Japan posted a $6.5-billion trade deficit in July, compared with a surplus the year before, as exports fell 8%. Exports of autos and electronics by Asia’s second-biggest economy have been hurt by the strengthening yen as well as weak demand from Europe.The metals and mining sector was lower even as copper added to Tuesday’s eight-cent runup with the metal up a penny at US$3.46 a pound. Teck Resources shed 44 cents to $29.48 while Sherritt International gave back 14 cents to $4.61.The energy sector was off 0.4% as the October crude price on the New York Mercantile Exchange rose 41 cents to US$97.25 a barrel amid a sharper than expected decline in U.S. inventories last week. Suncor Energy pulled back 51 cents to $31.68 and Canadian Natural Resources declined 31 cents to $31.46.Financials were also weak as Scotiabank eased 39 cents to $52.96.The gold sector was the leading advancer as December bullion faded 70 cents to US$1,642.20 an ounce. Iamgold Inc. rose 15 cents to $12.48.Markets have found some support this week on hopes that the European Central Bank will address the problem of high borrowing costs for heavily indebted countries such as Spain by buying government bonds.Europe’s financial crisis will remain a pressure point for investors. Greece’s prime minister will meet several European counterparts this week, starting Wednesday, as he seeks to get more time to enact painful reforms and spending cuts.Antonis Samaras said that he wants more time to carry out the measures, possibly setting the stage for confrontation with Germany, which has grown impatient with delays.Greek officials are preparing 11.5 billion euros in spending cuts the country needs to carry out in order to receive rescue loans protecting it from bankruptcy.Traders will also focus on the release mid-afternoon of minutes from the U.S. Federal Reserve’s last interest rate meeting for any indications that the central bank may be thinking about further stimulus measures.European bourses were sharply lower as London’s FTSE 100 index shed 1.47%, Frankfurt’s DAX was down 1.07% and the Paris CAC 40 was down 1.33%.In other 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 26 cents to $12.86.Shares in Dell Inc. slumped 6.9% to US$11.49 as the computer maker earned $732-million, or 42 cents per share, an 18% decline from last year as the growing popularity of smartphones and tablets undercut sales of computers.In a sign of further weakness ahead, Dell lowered its earnings target by 20% for its fiscal year ending in January. Dell trimmed its full-year guidance, even though its adjusted earnings for the just-completed quarter topped analyst projections.The Canadian Press