TORONTO - North American stock markets closed lower as investors appeared to decide that U.S. Federal Reserve chairman Ben Bernanke won't announce new stimulus measures in a key speech on Friday.
The S&P/TSX composite index fell 59.5 points to 12,284.31 with the gold sector limiting losses as bullion prices closed slightly higher after two days of steep losses.
The TSX Venture Exchange added 3.89 points to 1,739.48.
The Canadian dollar slipped 0.02 of a cent against the American currency to 101.34 cents US.
The Dow Jones industrial average dropped 170.89 points to 11,149.82.
The Nasdaq composite index lost 48.06 points to 2,419.63 while the S&P 500 index was down 18.33 points to 1,159.27.
Bernanke will deliver a speech just after North American markets open on Friday at an economic conference in Jackson Hole, Wyo. There had been hopes that he would use the occasion to announce further stimulus measures by the central bank to keep the U.S. economic recovery on the rails but expectations have since faded.
"If you're in Bernanke's shoes, on the one hand you sort of want to pacify the markets because that affects consumer confidence and the market is down quite a bit," said Luciano Orengo, portfolio manager at Manulife Asset Management.
"But at the same time, the economy, although it's slowing down, it is not that evident that we're in a recession or anything like that."
American markets had earlier jumped on news that Warren Buffett's Berkshire Hathaway will invest US$5 billion in Bank of America. The bank's shares later lost about half of their earlier gains but were still ahead 66 cents at US$7.65.
Bank of America shares had fallen sharply recently as doubts rose about the bank's' capital position.
Shares in Apple Inc. were off $2.46 or 0.65 per cent to US$373.72 after Steve Jobs announced he was departing as the tech giant's CEO and passing the job to Tim Cook, the company's chief operating officer.
Shares in rival Research In Motion (TSX:RIM) were down 36 cents at C$27.89 as the company said it is rolling out a new music- sharing service for BlackBerry customers who use the smartphone's popular instant messenger. BBM Music is a cloud-based service that allows those using BlackBerry Messenger, or BBM, to access and share music.
The TSX gold sector was the only positive group as bullion prices ticked higher after profit-taking and higher margin requirements at exchange operator CME Group had carved about US$150 from Monday's latest record close of just under US$1,900.
The December contract on the New York Mercantile Exchange closed up $5.90 to US$1,763.20 an ounce. Barrick Gold Corp. (TSX:ABX) rose $1.12 to C$49.37 while Goldcorp Inc. (TSX:G) gained $1.30 to $50.06.
Investors looking for a safe haven had pushed up the price of gold over the last few weeks as stock markets turned volatile on worries that the U.S. could slip back into recession.
There have also been increasing worries about the lingering European debt crisis.
The financial sector was down 0.76 per cent per cent as National Bank (TSX:NA) handed in a $312-million profit in its fiscal third quarter, up 15 per cent from the year earlier with the help of special items. Excluding special items, the bank's net income would have been $293 million, up seven per cent, resulting in $1.72 per share of profit, beating analyst estimates by a penny.
But National Bank stock gave up early gains and closed down $1.95 at $70.40 as analysts observed the positives were tempered by weaker capital markets revenue due to disappointing trading revenue after several stable quarters.
Royal Bank, (TSX:RY) which reports earnings Friday, fell 52 cents to $50.76 .
Oil prices were slightly higher with the October crude contract on the Nymex ahead 14 cents to US$85.30 a barrel and the TSX energy sector lost almost two per cent. Suncor Energy (TSX:SU) lost 74 cents to C$29.54 and Canadian Natural Resources (TSX:CNQ) gave back 66 cents to $34.40.
Natural gas giant Encana Corp. (TSX:ECA) plans to sell its North Texas natural gas producing assets in the Barnett shale play as part of a divestiture plan that could raise up to $2 billion for the company. Its shares lost 89 cents to $24.
Niko Resources Inc. (TSX:NKO) said its second-quarter revenue was down 15 per cent from the same time last year, as gas production fell. The Calgary-based company reported a US$54.9-million net loss for the second quarter, or $1.07 per share. Its shares fell $3.02 to $53.31.
The base metals sector was off 0.67 per cent as metal prices also advanced with the September copper contract in New York ahead eight cents at US$4.08 a pound. Teck Resources (TSX:TCK.B) eased $1.08 to C$39.42 while First Quantum Minerals (TSX:FM) climbed 46 cents to $21.31.
