The Toronto stock market moved lower on Tuesday as investors backed away from the optimism that characterized trading earlier in the session.
The S&P/TSX composite index dropped 56.36 points to 12,257.18. The TSX Venture Exchange fell 20.25 points to 1,313.21.
The Canadian dollar was at 101.98 US, off 0.19 of a cent, as the safe-haven greenback lost some ground.
Traders had kept stock markets positive throughout much of the morning after U.S.
consumer confidence hit its highest level in seven months in September, but comments from a member of the U.S. Federal Reserve appeared to dash the sentiment.
Bank of Philadelphia president Charles Plosser questioned the Fed's latest round of stimulus, suggesting in a speech that it wouldn't help the economy grow. That opinion seemed enough to tip the scale back towards concern.
Wall Street bore the brunt of the decline, with the Dow Jones industrials backing off 101.37 points to 13,457.55. The Nasdaq composite index slid 43.05 points to 3,117.73 and the S&P 500 index was 15.30 points lower to 1,441.59.
Caterpillar Inc., the world's largest maker of construction and mining equipment, added to the eroding sentiment. The company is lowering expectations for its profit in 2015 because of slower-than-ex-pected growth in the global economy.
"Our view of the world right now is that we don't think the markets will be propelled forward in the next month," said Paul Vaillancourt, vice-president and chief investment officer at Canadian Wealth Management."We are anticipating a little bit of consolidation after a pretty good run.
But having said that ... we don't think we're going to see a significant selloff."
In commodities, November crude on the New York Mercantile Exchange moved down 56¢ to close at US$91.37 a barrel. The TSX energy sector lost 1.4%.
December bullion increased $1.80 to US$1,766.40 an ounce. December copper gained 2.7¢ to US$3.76 a pound.
A report from Statistics Canada said retail sales rose 0.7% to $39 billion in July, more than offsetting a decline in June. The increase was largely weighted in higher sales of cars, trucks and auto parts, as well as general merchandise.
South of the border, the Conference Board said its consumer confidence index rose to 70.3, up from 61.3 in August - the highest reading since February.
Another key issue is whether eurozone countries will grant Greece more time to reach its deficit-reduction targets. The country also needs to finalize a package of austerity measures but leaders are struggling to compromise as popular anger increases.
