TORONTO - The Toronto stock market closed little changed, supported by bank stocks ahead of more financial sector earnings but weighed down by falling gold stocks as a second day of profit-taking sent the precious metal tumbling more than US$100.
The S&P/TSX composite index edged up 5.48 points to 12,343.81 and the TSX Venture Exchange lost 25.28 points to 1,735.58.
The gold sector fell about three per cent as gold prices fell after a string of record high closes that pushed bullion to just below the US$1,900 mark on Monday, a gain of almost US$300 or almost 19 per cent from the beginning of August.
The December contract in New York plunged $104 to close at US$1,757.30 per ounce. Barrick Gold Corp. (TSX:ABX) was down $1.85 to C$48.25 while Goldcorp Inc. (TSX:G) fell $2.03 to $48.76.
Investors had fled to gold over the last few weeks as stock markets turned volatile on worries that the U.S. could slip back into recession and the lingering European debt crisis.
"Investors decided that the markets are far too volatile and they don't know what's going on with the global economy and have been rushing into gold," said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis.
"I think that, unfortunately, that is less of a safe haven than many think," Warne said.
As financial markets begin to calm down, it's no surprise that "people are realizing that gold may not be a good long-term investment."
New York indexes racked up solid gains amid data showing that orders for U.S. durable goods that are expected to last at least three years jumped four per cent in July, much better than the 2.2 per cent increase that economists had expected.
Excluding transportation goods, U.S. durable goods orders rose 0.7 per cent.
But the news wasn't all positive: a key category that tracks business investment plans dropped 1.5 per cent, the biggest drop in six months. That suggests U.S. businesses are pulling back on spending.
The Dow Jones industrial average gained 143.95 points to 11,320.71.
The Nasdaq composite index rose 21.63 points to 2,467.69, while the S&P 500 index was up 15.25 points to 1,177.6.
The Canadian dollar rose 0.15 of a cent to 101.36 US as other data showed economic uncertainty is weighing on Canadian consumers. The Conference Board of Canada's consumer confidence index fell 6.6 points in August, the fourth consecutive monthly decline.
The Ottawa-based economic forecaster said its index of Canadian consumer confidence fell to 74.7, the lowest since July 2009.
At the same time, investors are cautious ahead of Friday's speech by Federal Reserve chairman Ben Bernanke.
Investors hope that the U.S. central bank chief will announce more stimulus for the economy amid fear that the United States is in danger of slipping into recession.
But analysts warn that those hopes for good news from Bernanke's speech may be inflated.
"I am concerned that we could see a disappointing reaction on Friday," Warne said.
"What he's likely to do is repeat the list of actions the Fed could take and basically say, we stand ready to act if needed but we're not doing anything right now and we've already said we're going to keep interest rates low."
The financial group was the strongest TSX component, up 1.5 per cent a day after Bank of Montreal (TSX:BMO) delivered a strong earnings report. National Bank (TSX:NA), which hands in earnings Thursday, gained 59 cents to $72.35 while Royal Bank (TSX:RY), which reports Friday, climbed $1.22 to $51.28.
Oil prices had improved following the durable goods report but by the close the October crude contract on the New York Mercantile Exchange had drifted 28 cents lower to US$85.16 a barrel after rising about US$3 over the past two sessions. The energy sector was up slightly as Suncor Energy (TSX:SU) rose 18 cents to C$30.28 while Cenovus Energy (TSX:CVE) gave back 55 cents to $33.99.
The base metals sector was down 0.58 per cent with copper unchanged at US$4.00 a pound. Teck Resources Ltd. (TSX:TCK.B) gained 96 cents to $40.50 while Ivanhoe Mines (TSX:IVN) lost 98 cents to C$19.64 after surging 20 per cent on Tuesday.
Rio Tinto PLC has paid $529.5 million to raise its stake in Ivanhoe to 48.5 per cent, paying $18.98 a share. Vancouver-headquartered Ivanhoe has been developing the Oyu Tolgoi copper and gold deposit in Mongolia with financial support from Rio Tinto, one of the world's largest mining companies.
BHP Billiton Ltd., the world's biggest mining company, said Wednesday its annual profit was up nearly 86 per cent to US$23.6 billion amid soaring prices for iron ore and copper but it warned that cost pressures could hurt its earnings in the longer term and its shares were up five cents to US$80.95.
Elsewhere on the corporate front, Research In Motion Ltd. (TSX:RIM) also helped lift the TSX. Its shares advanced $1.07 to $28.25 after Bloomberg reported that the company is preparing a future slate of handsets to run apps designed for the Android mobile operating system designed by Google.
A division of CAE Inc. (TSX:CAE) is paying US$130 million to acquire Medical Education Technologies, Inc., which supplies medical simulation technologies and educational software. CAE shares were down seven cents to $10.10.
Afexa Life Sciences Inc. (TSX:FXA) is reiterating its rejection of a hostile takeover bid by Montreal-based Paladin Labs Inc. The maker of the popular Cold-FX flu remedy says the unsolicited offer from Paladin (TSX:PLB) is financially inadequate and not in the company's best interests. Paladin shares slipped six cents to $2.13 while Afexa shares were up one cent to 57 cents.
