The Toronto stock market closed near its lows of the day on Wednesday as traders began to question whether optimism about Europe's economy might be premature.
The S&P/TSX composite index was down 82.46 points at 11,781.04, pulling back from hefty gains made in the past several sessions. On Tuesday, the TSX closed at its highest level since July 4.
The TSX Venture Exchange slipped 4.88 points to 1,185.68, while the Canadian dollar rose to US$1.0054, up US0.29¢.
Traders have taken a more optimistic turn, motivated in part by comments from the U.S. and European central banks, but sentiment seems to be shifting back towards caution over whether economic improvement will be as good as first thought.
Several big consumer goods companies warned that weak demand in Europe was cutting into their revenue. That followed worrisome economic news from England, France and Germany, where growth had offset recessions in other European countries like Italy and Greece.
"It's quite opposite to what we had seen at the beginning of the year where we had seen strong employment numbers and strong growth," said Sadiq Adatia, chief investment officer at Sun Life Global Investment.
But he added, "I think investors as a whole are kind of rooting for the economy ... that's why when good news comes up they jump on it and start to push the markets higher a little bit, and then when it leads to the negative news they jump back down again."
On the TSX, information technology stocks were up 0.6%, with Research In Motion shares rising 24¢, to $7.56 after an analyst report suggested it should partner with or be bought out by Samsung.
Telecom stocks gained 0.04% after BCE Inc. announced an increase to both its dividend and 2012 earnings forecast.
The telecom and media company says the dividend will rise to $2.27 per share annually, or 56.75¢ per share quarterly, beginning with the October payout. Expected adjusted earnings have been increased by 2¢ per share, to a range of between $3.15 and $3.20 per share.
The Montreal-based company said its profit rose to $773 million, or $1 per share, compared with $590 million, or 76¢ a share, a year ago. BCE shares were up $1.05 to $44.30.
On Wall Street, the Dow Jones industrial average increased 7.04 points to 13,175.64, closing out a session characterized by a slow climb out of negative territory. The Nasdaq fell 4.61 points to 3,011.25 and the S&P ticked up 0.87 of a point to 1,402.22.