The Toronto stock market was lower late Thursday morning as mining stocks declined amid lower prices while investors were unimpressed with the latest earnings reports from the U.S. financial sector.
The S&P/TSX composite index lost 39.3 points to 11,493.5. The TSX Venture Exchange fell 11.15 points to 1,325.55.
The Canadian dollar was having a rare down day, declining 0.35 of a cent to 97.13 cents US after a weak U.S. currency sent the loonie up a full cent on Wednesday.
On the economic front, Statistics Canada reported that declines in the aerospace and vehicle manufacturing segments were largely responsible for a 2.1 per cent drop in manufacturing sales in August. The dip followed a 5.2 per cent gain in July.
Production in the aerospace product and parts industry fell 35.6 per cent while manufacturing sales in the motor vehicle industry fell 6.3 per cent during August.
Commodity stocks led the way lower on the TSX with the gold sector down one per cent as the December bullion contract on the Nymex eased $5.90 to US$1,058.80. Kinross Gold Corp. (TSX: K) lost 27 cents to $23.80.
The energy sector was down 0.32 per cent even as the November crude contract on the New York Mercantile Exchange rose 67 cents to US$75.85 a barrel. Oil prices took off after the U.S. Department of Energy reported that crude inventories rose by 400,000 barrels last week but gasoline levels dropped by 5.2 million barrels while distillates fell 1.1 million barrels.
New York markets were also weak after Goldman Sachs said Thursday that it earned US$3.19 billion, or US$5.25 per share in the third quarter. Analysts had been expecting earnings of $4.24 per share, on average.
However, investors reacted coolly to the firm's results as revenue from its mergers and acquisitions operations dipped sharply from the previous quarter, reflecting the general slowness in takeover activity, and its shares lost $4.06 to US$188.22.
"It was interesting with Goldman (with) people sort of focusing on their M&A work because I actually think the M&A cycle is something that is probably going to persist," said Norman Raschkowan, chief investment officer at Mackenzie Financial Corp.
"But I think the financials have gotten ahead of themselves, in the U.S. in particular in that they still have a tough road – especially those that have exposure to commercial real estate."
Citigroup reported a slightly smaller loss per share than expected but said its credit losses remain high. Its shares fell 24 cents to US$4.76.
The Dow Jones industrials lost 15 points to 10,009.9.
Results from JPMorgan set a high bar for its peers on Wednesday, reporting a US$3.59 billion profit that came in well above Wall Street's expectations and sent the Dow above 10,000 for the first time in a year.
The Nasdaq composite index declined 9.35 points to 2,162.88 while the S&P 500 index moved down 2.4 points to 1,089.6.
Also depressing sentiment was world-leading mobile phone maker Nokia Corp. The Helsinki-based company reported a loss of euro559 million (US$832 million) in the third quarter, taking hits from a 20 per cent drop in sales and a one-time charge for the fallen value of its network equipment unit.
Nokia made a profit of euro1.09 billion (US$1.61 billion) in the same quarter of 2008 and its shares fell $1.73 to US$13.66.
Tech firms Google Inc., IBM Corp. and Advanced Micro Devices will issue their results after the market's close Thursday.
Other commodity prices were also soft with December copper down a cent to US$2.83 a pound.
The TSX base metals sector fell 0.9 per cent with Teck Resources (TSX: TCK.B) off 49 cents to $33.84.
Ivanhoe Mines Ltd. (TSX: IVN) executive chairman Robert Friedland says financing the Oyu Tolgoi project in Mongolia is "the least of our concerns." And he promises no funding delays between now and when the copper-gold mine reaches commercial production in 2013. Ivanhoe shares dipped 23 cents at $12.58.
In other corporate news, Pottruff & Smith Travel Insurance Brokers Inc., one of the largest travel insurance brokers and third-party administrators in Canada, has been acquired by Manulife Financial Corp. (TSX: MFC).
Terms of the transaction were not disclosed and Manulife shares declined 19 cents to $22.29.
Canwest Global Communications Corp. said it has been notified by the Toronto Stock Exchange that its subordinate voting shares (TSX: CGS) and non-voting shares (TSX: CGS.A) will be delisted at the close of trading Nov. 13 because of failure to meet listing requirements. Trading in the shares will be suspended.
The media conglomerate's stock was halted Oct. 5 when it filed for creditor protection under a mountain of debt.
In Asia, stocks had rallied hard, as investors caught up with the gains posted in Europe and the U.S. Wednesday.
In Japan, the Nikkei 225 stock average gained 1.8 per cent, and Hong Kong's benchmark added 0.5 per cent, hitting a new high for the year during trade.
London's FTSE 100 index was down 0.32 per cent, Frankfurt's DAX fell 0.35 per cent while the Paris CAC 40 was flat.
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