In this Thursday, Aug. 21, 2014, file photo, trader Edward McCarthy, left, works on the floor of the New York Stock Exchange. As stocks continue to rise, investors are wondering if it’s time to sell.Richard Drew/The Associated Press
The Toronto stock market was modestly lower Wednesday as a dearth of economic and corporate news left traders free to focus on two major events next week.
Traders are wondering if the U.S. Federal Reserve will adopt a more hawkish stance at the end of its scheduled meeting next Wednesday on interest rates. They are also looking at the Scottish referendum on independence that is shaping up to be a more of a close run than expected.
The S&P/TSX composite index fell 36.55 points to 15,500.26. The Canadian dollar lost 0.08 of a cent to 91.07 cents (U.S.).
U.S. indexes were generally lower as the Dow Jones industrials dropped 14.32 points to 16,999.55, the Nasdaq gained three points to 4,555.29 while the S&P 500 index slipped 2.32 points to 1,986.12.
The greenback has strengthened recently as markets anticipate the Fed might raise its benchmark interest rate sooner than expected. A hike has been expected for around the middle of next year.
"U.S. 10-year yields continued their ascent overnight, nearly touching 2.52 per cent, reflecting the divergence in the Fed's policy versus nearly everywhere else and as markets come to terms with the fact that rates won't stay low forever after yields hit a 14-month low in August," observed BMO Capital Markets senior economist Alex Koustas.
The Scottish independence referendum Sept. 18 has provided markets with a good helping of uncertainty.
Recent opinion polls have shown the two sides neck and neck. With polls showing the referendum too close to call, the pound has fallen almost three cents this week against the greenback to a 10-month low of $1.6052 (U.S.) Wednesday.
On the corporate front, Bank of Montreal has again lowered its five-year fixed mortgage rate to 2.99 per cent, from 3.29 per cent, the lowest rate currently offered by Canada's big banks. Its shares were ahead 30 cents to $84.54 (Canadian).
Grocer Empire Co. will release its quarterly earnings report Wednesday.
Dollar-store operator Dollarama posts second-quarter results Thursday, while Hudson's Bay Co., which last quarter got a big boost from its acquisition of Saks Inc., reports on Friday.
U.S. retailer Dollar General is going hostile with its $9.1-billion (U.S.) bid for Family Dollar after its rival repeatedly rejected previous offers. The discount chain has commenced an open offering to investors of Family Stores Dollar Inc. for $80 per share in cash, the same offer that was rejected last week by the company's board.
Markets also digested comments from China's premier as he promised Wednesday to open the world's No. 2 economy wider to foreign companies, promising favourable conditions despite a wave of anti-monopoly investigations that business groups say might be aimed at limiting competition. Business groups have said regulators might be misusing investigations to force companies to lower prices or to promote Chinese competitors.
The TSX was weighed down by a 1.5 per cent slide in the gold sector as December bullion gained $1.50 to $1,250 an ounce.
The base metals sector was also a drag, down 0.75 per cent while December copper was up a cent to $3.11 a pound.
October crude in New York dipped 50 cents to $92.25 a barrel and the energy sector slipped 0.6 per cent.
Financials led advancers with Element Financial ahead 30 cents to $14.41 (Canadian).