Roger Biduk - Bay Street Lower on Financials

Roger Biduk
The Toronto stock market tumbled as investors took profits from the five-month-old rally following a warning about the financial sector's health and ahead of Wednesday's interest rate announcement by the U.S. Federal Reserve.

The S&P/TSX Capped Financial Index fell 2.60%.
Royal Host Real Estate Investment (RYL.UN) -9.02% to $2.42. Melcor Developments Ltd. (MRD) -7.11% to $8.10. Plutonic Power Corporation (PCC) -6.85% to $2.99. H & R Real Estate Investment T (HR.UN)
-5.22% to $13.06. Sun Life Financial Inc. (SLF)
-5.20% to $31.57.

Financial sector losses picked up following comments from U.S. analyst Richard Bove of Rochdale Securities, who said that U.S. bank earnings are unlikely to improve in the second half and that many firms may post losses. He said investors should lock in profits after a surge in bank stocks since early March.
Also, U.S. bank CIT Group warned of "substantial doubt" regarding its ability to continue as a going concern, due to "on-going stress in the credit markets, operating losses, credit ratings downgrades, and regulatory and cash restrictions."

S&P/TSX Capped Diversified Metals & Mining Index fell .90% as aluminum fell 1.45%, copper was 1.23% lower at $2.05 and silver was flat at $14.35.
Osisko Mining Corporation (OSK) +6.39% to $7.49.
Migao Corporation (MGO) -10.42% to $6.96. Thompson Creek Metals Company (TCM.WT)
-8.19% to $6.95.

Roger Biduk
The S&P/TSX composite index dropped 164.2 points to 10,629.47. The TSX loss followed a 92-point slide Monday. However, the Toronto market is still ahead more than 40 per cent since the start of the rally in early March, reflecting general optimism that the economy is recovering.
The TSX Venture Exchange declined 8.37 points to 1,176.84.

The S&P/TSX Capped Telecom Services Index was .14% higher and the S&P/TSX Capped Information Technology Index fell 0.26%.
SXC Health Solutions Corp. (SXC) +7.52% to $44.19.

The CDN$ closed down 1.06 cents to 90.79 cents US as the American dollar continued to rally in the wake of Friday's much better than expected jobless report for last month.

The April crude contract on the New York Mercantile Exchange fell 1.63% to $69.45 and natural gas fell 2.75% to $3.54 as the S&P/TSX Energy Index fell 1.67%.

The S&P/TSX Capped Industrials Index was down 0.91%.
Rocky Mountain Dealerships Inc (RME) +13.33% to $5.10.
Bombardier Aerospace (TSX:BBD.B) shares were down 27 cents to $4.06 after the company cancelled an order from Italy's My Air for 15 of its CRJ1000 aircraft as the carrier faces an "uncertain situation." Italy's civil aviation authority suspended My Air's licence last month due to financial troubles at the airline.


Roger Biduk
In the Service sector:
Great Canadian Gaming Corporation (GC) +14.02% to $6.83.

On the Canadian economic front, Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts decreased to 132,100 units in July from 137,800 units in June, mainly because of weakness in the multiple starts segment.

The S&P/TSX Consumer Discretionary Index was 1.34% lower and the S&P/TSX Consumer Staples Index fell 0.83%.
Cascades Inc. (CAS) +9.43% to $5.80. ZCL Composites Inc. (ZCL) +5.26% to $4.00.

In earnings news, hardware and home improvement retailer Rona Inc. (TSX:RON) says a drop in housing starts led to a seven per cent dip in second-quarter sales and a reduction in profits for the period. Rona booked profits of $60.8 million, down from $76.6 million a year ago and its shares added two cents to $14.35.
Shares in Leon's Furniture Ltd. (TSX:LNF) rose five cents to $10.10 after the Toronto-based retailer said its profit last quarter was $8.62 million, 26 per cent lower than the same time last year. Total sales including franchise stores fell to $209.9 million from $224.7 million, a decline of $14.7 million.

Roger Biduk
The S&P/TSX Capped Utilities Index fell 0.51%.

Tissue maker and cardboard producer Cascades Inc. (TSX:CAS) said Tuesday it turned a profit of $30 million during the second quarter despite a modest dip in sales. The showing reversed a year-earlier loss of $25 million and its shares jumped 50 cents to $5.80.

The S&P/TSX Global Gold Index fell .20% as the April bullion contract in New York gained $.70 to US$947.60 an ounce.

After the market closed, Brookfield Asset Management (TSX:BAM.A) and Brookfield Properties (TSX:BPO) announced a plan to form a $4-billion consortium with other institutional investors to invest in under-performing real estate in several regions of the world.
Brookfield has allocated $1 billion to the consortium with opportunities in the office sector being funded by Brookfield Properties and opportunities in other sectors being funded by Brookfield Asset Management.

The S&P/TSX Capped Health Care Index was higher by 0.77%.
Paladin Labs Inc. (PLB) -6.81% to $17.94.