The S&P/TSX composite index was down 73.08 points to 12,672.3 as gold stocks gave up a chunk of the gains racked up during July.
The Canadian dollar shed early gains and dipped 0.29 of a cent against the U.S. dollar to 96.94 cents US. The greenback strengthened in the wake of positive news on new home sales along with a higher reading from financial information company Markit which reported its July flash purchasing managers’ index for the U.S. manufacturing sector rose to 53.2, the highest it's been in four months.
U.S. indexes were lower amid strong earnings reports from the likes of Apple Inc. and Ford Motor Co.
A weak report from heavy equipment maker Caterpillar helped push the Dow Jones industrials down 25.5 points to 15,542.24, the Nasdaq added 0.33 of a point to 3,579.6 and the S&P 500 index was off 6.45 points to 1,685.94.
Meanwhile, in Canada, Cenovus Energy Inc. (TSX:CVE) had $255 million or 34 cents per share in operating earnings and a $179-million net profit in the second quarter. The operating earnings were below a consensus estimate of 48 cents. Its shares fell $1.76 to $30.49.
Canadian Pacific Railway (TSX:CP) posted net income for the second-quarter of $252 million, or $1.43 per diluted share, versus $103 million, or 60 cents per share, a year earlier. The earnings missed estimates and its stock dropped 2.1 per cent to $127.44.
But the stock was off session lows as the railroad's operating ratio, which is a key measure of how efficiently railways operate, improved to 71.9 per cent in the second quarter, an all-time record for the railroad.
"(CEO) Hunter Harrison has actually delivered," said Chris King, portfolio manager at Morgan, Meighen and Associates. "For him to move it down to that level, man that tells you he is the god of railways."
On a more positive note, Rogers Communications Inc. (TSX:RCI.B) shares were ahead 72 cents to $41.95 as the company reported $497 million in quarterly adjusted net income, a four per cent increase from last year and better than analysts’ consensus estimate of $491.95 million.
Loblaw Companies Ltd. (TSX:L) made $178 million in net earnings in the second quarter, up from $156 million in the same period a year ago. The grocer’s basic net earnings per common share rose 14.5 per cent in the quarter to 63 cents, about five cents per share better than a consensus estimate compiled by Thomson Reuters and its shares advanced $1.52 to $49.46.
In the U.S., Facebook stock soared 17 per cent in after-hours trading to US$30.56 as the social networking company posted earnings and revenue after the close that beat expectations.
Quarterly earnings at Caterpillar fell 43 per cent $960 million, or $1.45 per share and the company cut its profit and revenue outlook for the year. Analysts had expected a profit of $1.69 per share and its shares dropped $2.08 to US$83.44.
The TSX base metals sector fell 2.26 per cent amid weak Chinese manufacturing data while metal prices declined with September copper down two cents to US$3.18 a pound. An HSBC survey showed China’s manufacturing at an 11-month low this month. HSBC said the preliminary version of its monthly purchasing managers index declined to 47.7 this month from June’s 48.2 on a 100-point scale on which numbers below 50 show a contraction in activity.
The gold sector was down about 4.6 per cent while August bullion declined $15 to US$1,319.70 an ounce. Goldcorp Inc. (TSX:G) faded $1.45 to C$29.24 and Barrick Gold (TSX:ABX) fell $1.01 to $17.67.
The energy sector dropped 1.64 per cent and the September crude contract on the New York Mercantile Exchange was down $1.84 to US$105.39 a barrel as traders weighed the Chinese manufacturing data against a slightly bigger than expected drop in U.S. crude inventories. Energy Department data showed supplies dropped by 2.8 million barrels last week, against the 2.6 million barrel drop that had been expected.
Other economic news showed that Americans snapped up new homes in June at the fastest pace in five years. The Commerce Department says sales rose 8.3 per cent to a seasonally adjusted pace of 497,000. That’s up from 459,000 in May, which was revised lower.
In other corporate developments, Bombardier Aerospace says the first flight of its new CSeries commercial jet will occur in the coming weeks, without giving a specific date. The Montreal-based company had been aiming for the first flight by the end of July. Bombardier Inc. (TSX:BBD.B) shares lost six cents to $5.01.