The Canadian Press

The Toronto stock market closed sharply lower Tuesday as new data showed a big deterioration in U.S. consumer confidence this month.

The S&P/TSX composite index lost 108.04 points to 11,526.71, down for a second day.

The loss followed another decline on Monday that broke an eight-day string of gains that had sent the TSX up over 5% on an improved outlook for the American economy.

Investors hoping to find further evidence of strength were disappointed when the U.S. Conference Board reported that its consumer confidence index fell almost 11 points to 46 in February, down from a revised 56.5 in January. Analysts had been expecting only a slight decrease to 55.

“I think, for the most part, consumers and businesses are still quite frightened, having experienced a near-death experience over the last two years,” said Irwin Michael, president of I.A. Michael Investment Counsel Ltd. and manager of three ABC funds.

“It’s a stock pickers market — there are opportunities for those who are astute and … patient. Unfortunately, there’s not a lot of patience out there right now.”

The Canadian dollar dropped 1.27¢ to US94.64¢ as the consumer data pushed the American dollar higher, which in turn depressed commodity prices.

The TSX energy sector lost 1.09% as oil prices fell back from the US$80-a-barrel level after rallying 15% over the last three weeks on hopes that improving economic conditions would lead to higher demand.

The April crude contract on the New York Mercantile Exchange was down $1.45 to US$78.86 a barrel. Suncor Energy (TSX:SU) backed off 70¢ to C$30.85 and Canadian Natural Resources (TSX:CNQ) moved 83¢ lower to C$71.19.

The base metals sector stepped back 2.64% with the March copper contract off 9¢ to US$3.22 a pound. Teck Resources (TSX:TCK.B) slipped $1.25 to C$38.47 while HudBay Minerals (TSX:HBM) lost 42¢ to C$13.14.

The TSX gold sector was down 2.19% as the April gold contract on the Nymex eased $9.90 to US$1,103 an ounce. Barrick Gold Corp. (TSX:ABX) lost 70¢ to C$39.37 while Goldcorp Inc. (TSX:G) was down $1.25 at C$38.45.

The financial sector was 0.75% lower with Royal Bank (TSX:RY) down 55¢ to $56.05 and Scotiabank (TSX:BNS) off 34¢ at $47.15.

On the plus side, Home Depot Inc. turned in a fiscal fourth-quarter profit while the home improvement retailer also boosted its quarterly dividend for the first time since 2006 and gave a 2010 profit forecast above analysts’ expectations.

The company earned US$342 million or 20¢ per share for the quarter, a sharp turnaround from a US$54-million loss a year ago. Sales dipped 0.3% to US$14.57 billion and its shares gained 43¢ to US$30.75.

“You need to see more of that but the average investor is quite content to sit in money market funds, which of itself is earning less than a quarter point on a per annum basis,” Michael said.

“There’s a lot of money that would love the opportunity to get invested but until they’re really sure, they have to work off this fear factor, they’re not going to do anything.”

The TSX Venture Exchange was down 8.48 points to 1,519.99.

New York markets were also negative even as the Standard & Poor’s/Case-Shiller 20-city home price index showed that American home prices rose nationally for the seventh straight month in December.

The Dow Jones industrial average dropped 100.97 points to 10,282.41. The Nasdaq composite index moved 28.59 points lower to 2,213.44 while the S&P 500 index was off 13.41 points at 1,094.6.

Investors also looked ahead to Wednesday, when U.S. Federal Reserve chairman Ben Bernanke will tell U.S. legislators about last week’s decision by the Fed to raise its discount rate by a quarter of a percentage point to 0.75%. The discount rate is the rate banks pay for emergency loans from the Fed.

In other earnings news, Calgary-based TransCanada Corp. (TSX:TRP) shares climbed 28¢ to $34.93 after it reported a 37.5% improvement in fourth-quarter profit to $381 million. TransCanada increased its quarterly dividend to 40¢ per share, the equivalent of $1.60 per year, up 5%. The company’s revenue declined 5.4% to $2.2 billion.

Canadian bakery giant George Weston Ltd. (TSX:WN) reported its net earnings slid to $82 million in the fourth quarter. That was down sharply from $405 million a year ago when it booked gains from the sale of its Neilson Dairy business. Quarterly sales fell 6.4% to $7.5 billion, also impacted by the sale of the dairy division. Its shares rose 80¢ to $71.50.

@page_break@Meanwhile, the Wall Street Journal said that Canadian property manager Brookfield Asset Management (TSX:BAM.A) is preparing to bid on a large chunk of U.S. mall owner General Growth Properties. It added the move is being made in an attempt to beat an unsolicited US$10-billion offer by rival Simon Property Group. Brookfield has declined to comment on the report. Its shares gained 11¢ to $24.17.