TSX declines on earnings season worries

By John Tilak
July 8, 2014
A sign board displaying Toronto Stock Exchange stock information is seen in Toronto
A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

By John Tilak

TORONTO (Reuters) - Canada's main stock index slipped for a second straight session on Tuesday as apprehensions about the upcoming U.S. and Canadian earnings seasons fueled declines in most major sectors.

Worries that U.S. interest rates might rise earlier than expected and fears that stock prices might have run ahead of themselves also weighed on the market.

Telecoms shares remained in selloff mode, a day after the government announced a new spectrum auction that favors smaller industry players, and were one of the biggest drags on the market.

The U.S. earnings season kicked off with Alcoa Inc reporting second-quarter results after the market closed. Major Canadian companies are expected to begin unveiling their quarterly reports later this month.

“There’s some trepidation about whether corporate earnings will come in as strong as the market expects,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

“This bull run has been underpinned by strong fundamentals, but some concern about earnings is to be expected,” he added.

The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> closed down 35.75 points, or 0.24 percent, at 15,137.18. Eight of the 10 main sectors on the index were in the red.

Financials, the index's most heavily weighted sector, gave back 0.2 percent. Toronto Dominion Bank lost 0.1 percent to C$54.99, and Bank of Nova Scotia fell 0.5 percent to C$71.89.

Shares of energy producers slipped 0.4 percent, with Brent crude oil prices trading lower. Suncor Energy Inc shed 0.2 percent to C$45.35, and Talisman Energy Inc fell 0.2 percent to C$10.87.

Shares of telecoms providers dropped 0.8 percent, with Telus Corp weakening 2.1 percent to C$38.47 and Rogers Communications Inc declining 0.4 percent to C$42.20.

In corporate news, Intertape Polymer Group Inc said late on Monday it raised its dividend by 50 percent. The stock shot up 11.6 percent, to C$13.65.

($1=$1.07 Canadian)

(Editing by Peter Galloway and Chris Reese)