TORONTO -- The Toronto stock market closed lower for a third consecutive session Wednesday while New York markets were flat after a disappointing read on American retail sales that again called into question the strength of U.S. economic recovery.
The S&P/TSX composite closed down 62.43 points at 14,980.72, after falling almost 127 points the two previous sessions, including more than 109 points on Tuesday.
Meanwhile, the loonie ticked higher as the retail sales report contributed to recent weakness in the U.S. dollar, rising 0.35 of a U.S. cent to 83.56 cents -- the higher range of where it has traded since mid-April.
However, its a range that the BMO's Paul Taylor says will be difficult to maintain, particularly if the recent strengthening in oil prices above $60 a barrel is the "dead cat bounce" that many expect.
The loonie could fall to US$0.75 by next March should oil prices retreat as expected even from their current depressed levels, said Taylor, chief investment officer, asset allocation, BMO Global Asset Management Canada.
In New York, the Dow Jones industrial average finished 7.74 points lower at 18,060.49, adding to losses of almost 123 points the previous two days. The S&P 500 edged 0.64 of a point lower to 2,098.48, while the Nasdaq gained 5.50 points to 4,981.69.
Commodities were also mixed, with the June gold contract rising $25.80 to US$1,218.20 an ounce in the face of the weaker U.S. currency as well as a flight to safety as a deal between Greece and its creditors remains elusive and fears of a sovereign debt default grow.
June oil fell 25 cents to US$60.50 a barrel.
In economic news, the Commerce Department reported that U.S. retail sales were unchanged in April after rising 1.1 per cent in March and below analyst estimates.
The figures also challenged assumptions that the harsh winter weather has been to blame and that a spring rebound in retail spending was certain to materialize.
"Instead of cheering bad news as had happened in the past, traders have started to react negatively on bad news with the impact of data on corporate earnings becoming more important than its impact on liquidity," Colin Cieszynski, chief market strategist at CMC Markets Canada, said in a commentary.
Meanwhile, Taylor said he remains relatively optimistic about the U.S. market, expecting it to produce returns of six to as much as eight per cent this year and easily outperform the TSX as lower oil prices negatively impact Canadian corporate earnings.
"Consistent with our call for a bit of further weakness in oil, we think the Canadian market represents less positive value than the U.S. and, certainly, Europe and Japan at this stage," he said.
In corporate news, Macy's reported profits down 13 per cent in the first quarter, blamed partly on severe winter weather and delayed merchandise shipments as a result of the U.S. West Coast port slowdown. The retailer also cited lower spending by foreign tourists because of the stronger U.S. dollar. Shares in Macy's (NYSE:M) closed down $1.60 or 2.45 per cent at US$63.73.
