TSX falls after soft US data

TORONTO — The Toronto stock sold off more than 160 points Friday as worries about the strength of the world’s biggest economy raised demand worries and helped send oil and metal prices tumbling.The S&P/TSX composite index dropped 163.3 points to 12,318.07.Falling commodities helped push the Canadian dollar down 0.32 of a cent to 98.62 cents US.U.S. indexes were lower amid earnings disappointments from banks and a reading on March retail sales that missed expectations.The Dow Jones industrials lost 46.69 points to 14,818.45 as U.S. retail sales for March were down 0.4%. Economists had expected a flat reading following a 1.1% 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.”The Nasdaq composite index declined 23.35 points to 3,276.81 while the S&P 500 index was down 10.23 points to 1,583.14.Four straight gains this week had pushed the Dow industrials and the S&P 500 index further into record territory. However, traders wonder if the rally, which has gone on non-stop all year, is looking a bit stretched.The TSX is now back in negative territory for the year.At the same time, a fourth day of gains Thursday left the Dow industrials up 13 per cent year to date and the S&P ahead 12%.But analysts think the TSX faces greater challenges since it is so weighted in favour of energy and mining companies.Those sectors put in a weak showing Friday as prices for commodities further declined in the wake of the weak U.S. retail data.The gold sector led decliners, down 5.25% as June bullion fell $67.10 to US$1,497.80 an ounce.Gold has fallen this week after Goldman Sachs dropped its forecast for 2013 to US$1,545 an ounce, down from a prior forecast of $1,610. Also, minutes of the latest Federal Reserve meeting showed members were at odds about when to stop quantitative easing.Goldcorp Inc. (TSX:G) gave back $1.46 to $30.05.Barrick Gold (TSX:ABX) faded $1.75 or seven per cent to $23.25. Barrick shares have been under particularly selling pressure this week, tumbling nine per cent on Wednesday after a Chilean court suspended its Pascua-Lama mine after indigenous communities complained that the project is threatening their water supply and polluting glaciers.The energy sector fell 2.22% as May crude on the New York Mercantile Exchange dropped $2.98 to US$90.53 a barrel.Oil continued to lose traction after the International Energy Agency lowered its forecast for global oil demand in 2013 by 45,000 barrels to 90.6 million barrels a day. Its predictions were similar to those made earlier this week by OPEC and the U.S. Energy Department. Canadian Natural Resources (TSX:CNQ) shed $1.26 to $31.23 while Cenovus Energy (TSX:CVE) fell 68 cents to $30.26.May copper stepped back 10 cents to US$3.33 a pound and the base metals sector declined 2.77 per cent. Rio Alto Mining (TSX:RIO) was down 26 cents at $4.34 and Teck Resources (TSX:TCK.B) dropped 47 cents to $28.23.Weakness spread across all TSX sectors with the financials down 0.6%. Bank of Montreal (TSX:BMO) was 59 cents lower to $62.53 and Manulife Financial (TSX:MFC) gave back 15 cents to $14.27.Traders also got their first look at earnings from American banks in the first quarter.Shares in JPMorgan Chase were down 36 cents to US$48.95 as the bank made US$6.1-billion in the quarter, after stripping out payments to preferred shareholders. That was up 34% from a year ago and amounted to $1.59 per share, 20 cents better than forecast.Revenue was down three per cent from a year ago to $25.8-billion, after stripping out the effect of an accounting charge. That beat analysts’ estimates of $25.7-billion.In Canada, Dollarama Inc. (TSX:DOL) is raising its dividend by three cents to 14 cents.The Montreal-based discount chain made the announcement as it also reported that its quarterly net earnings rose to $77.13-million or $1.04 per share, up from $63.6-million or 84 cents per share. Results ex-items came in at $1.06, four cents better than estimates.Dollarama also had $561.9-million in sales in the fourth quarter, beating estimates of $546.33-million and its shares gained $3.01 to $67.65.Shaw Communications Inc. (TSX:SJR.B) had $182-million or 38 cents per share of net income and $1.25-billion of revenue in the quarter ended Feb. 28, both up slightly from the same time last year. Shaw is raising its 2013 forecast for free cash flow, with capital spending weighted to the second half of this financial year but staying below 2012. Its shares dropped 43 cents to $24.23.

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