Inflation Fears Sink Stocks
May 11, 2011
The Toronto Stock Exchange 300 Composite Index fell 21.26 to 5162.83, after rising 10.21 Wednesday. New York saw a sharper sell-off, with the Dow Jones Industrial Average down 64.73 to 5647.65. Advancing issues led decliners in Toronto, 419 to 461. Volume totaled 85.9 million shares valued at 1.17 billion Canadian dollars, up from Wednesday's total of 83.4 million shares valued at C$980.8 million. Equity investors took their cue from bond markets, where yields rose on the latest U.S. economic data, sparking fears of higher interest rates, and a subsequent slowdown in corporate profit growth, said Katheryn Albertson, technical analyst at MMS International. Indeed, the Canadian long bond neared its 8% technical barrier that suggests higher rates lie ahead, and U.S. long bonds broke through their critical 7% level, Ms. Albertson said Furthermore, a 0.82% decline in TSE's gold sector added to the market's overall drop. In the group, Barrick Gold fell 0.50 to 37.40. even though gold stocks and the underlying metal traditionally perform well during inflationary periods. On the Comex division of the New York Mercantile Exchange, the gold price slid 60 U.S. cents to US$389 an ounce. Overall, 11 of the TSE's stock groups fell, with conglomerates leading the way, down 0.95%. Canadian Pacific fell 0.40 to 30.95. Among the more significant advancing sectors, communications and media rose 0.76%, buoyed by a rebound in Rogers Communications class B shares, which rose 0.85 to 10.50.
VastPress 2011 Vastopolis
