The S&P/TSX composite index was 51.01 points lower at 15,082.84 as traders looked to the latest interest rate announcement by the Bank of Canada and positive economic data from the United States.
The Canadian dollar moved up 0.48 of a U.S. cent to 80.54 cents as the central bank announced it would keep its key rate unchanged at 0.75 per cent. The move came as little surprise to analysts — they had generally expected the bank to hold the line on interest rates following a quarter-point cut in January.
New York indexes were also in the red amid a positive assessment of the economy in the U.S. Federal Reserve's latest regional snapshot. The Fed says the economy was growing at a moderate pace through mid-February despite severe winter weather.
There was also positive employment data two days ahead of the U.S. government's February report on job growth. Payroll firm ADP reported that the American private sector created 212,000 jobs in last month, slightly below expectations of 219,000. Economists generally expect the American economy to have created a total of 235,000 jobs last month.
The Dow Jones Industrial average dropped 106.47 points to 18,096.9, the Nasdaq declined 12.76 points to 4,967.14 and the S&P 500 index fell 9.24 points to 2,098.54.
Some analysts suggested investors were selling stocks ahead of the U.S. government's jobs report since a stronger than expected report could persuade the Fed to move sooner than later in raising interest rates. Markets generally expect the Fed to raise rates sometime this year.
Traders will likely be looking for some direction now that the quarterly earnings season has ended.
"It’s a market that is now digesting the news from the earnings front and now saying, we’ve had a good rally in the U.S. and Canada during February and now that earnings are behind us — what’s next?" said Sid Mokhtari, a market technician at CIBC World Markets.
The base metals sector was down two per cent while May copper was unchanged at US$2.66 a pound.
The gold sector fell 2.2 per cent with April bullion off $3.50 at US$1,200.90 an ounce.
Crude prices had declined after the U.S. Energy Information Administration reported that crude inventories rose by 10.3 million barrels last week, far higher than the expected advance of 3.7 million barrels.
Oil closed up $1.01 to US$51.53 a barrel after Saudi Arabia said it increased its selling prices for its Arab Light crude oil for consumers in the U.S., Europe and Asia in April. Also, Saudi Arabia's Oil Minister Ali al-Naimi said in a speech in Berlin Wednesday that oil "demand is gradually rising, global economic growth seems more robust and the oil price is stabilizing."
The April crude contract in New York was up $1.01 to US$51.53 a barrel and the energy sector slipped 0.25 per cent.
The TSX found some support from modest increases in consumer staples and telecom stocks.
On the earnings front, Torstar Corp. (TSX:TS.B) posted fourth-quarter net income attributable to equity shareholders of $20.6 million or 26 cents per share, almost unchanged from a year ago. The newspaper publisher said segmented revenue was $244.9 million, down 9.8 per cent from a year ago, mostly reflecting lower print advertising revenue. Its shares shed four cents to $7.44.