TSX Dips on U.S. Inflation Numbers

Equities in Canada’s largest centre edged down on Thursday, led by declines in industrials and technology shares, as hotter-than-expected U.S. inflation data undermined interest rate cut hopes. The TSX Composite Index scaled back 129.36 points to 27,864.07 at noon EDT, after several days of new record highs. The Canadian dollar dipped 0.25 cents to 72.47 cents U.S. ON BAYSTREET The TSX Venture Exchange slipped 6.64 points to 779.82. Seven of the 12 TSX subgroups were lower midday, weighed most by information technology, lower by 2.1%, industrials, dipping 1.2%, and materials, off 0.7%. The five gainers were led by health-care, haler 1.1%, telecoms, up 0.7%, and financials, richer by 0.2.%. ON WALLSTREET Stocks slipped on Thursday after a new inflation report showed that wholesale costs rose more than expected last month. The Dow Jones Industrial Average backtracked 140.71 points to 44,781.48. The S&P 500 index faded 10.65 points to 6,455.93. The NASDAQ dropped 27.93 points to 21,685.21. Tapestry, the Coach New York and Kate Spade parent, sank more than 10% after its full-year outlook missed analyst estimates. Tapestry forecast full-year earnings of $5.30 to $5.45 per share, while analysts polled by FactSet were looking for $5.49. Deere shares dropped about 6% after it trimmed the top end of its full-year outlook. The Moline, Illinois-based manufacturer forecast net income of $4.75 billion to $5.25 billion, versus a previous forecast of $4.75 billion to $5.50 billion. Investors came into the session riding high, with the S&P 500 and NASDAQ posting fresh record highs in the previous session. The benchmarks got a jolt earlier this week after the release of a cooler-than-expected consumer price inflation report for July. That report stoked hopes among investors for a rate cut from the Federal Reserve at the end of its September policy meeting. However, investors were left feeling disappointed after July’s producer price index reading indicated that such a rate cut is far from guaranteed. Wholesale prices rose 0.9% on the month, much more than the 0.2% economists polled by Dow Jones were expecting. The index had come in flat in June. Wholesale prices can be a leading indicator for consumer prices. Some traders were looking past this PPI number because the report showed the increase was driven by a large gain in “portfolio management,” along with airfare. Without those factors the figures would have been much closer to estimates. Prices for 10-year Treasury lost ground Thursday, raising yields to 4.30% from Wednesday’s 4.24%. Treasury prices and yields move in opposite directions. Oil prices took on $1.06 to $63.71 U.S. a barrel. Gold prices collapsed $21.00 to $3,387.90 U.S. an ounce.