Mar. 18, 2009 (Baystreet.ca) --

10:33 am EST The Toronto stock market was sharply lower early Wednesday following six days of blistering gains that sent the main index up 13%

New York markets also stepped back after rising sharply for five of the past six days as investors look to the conclusion of the Federal Reserve's interest rate meeting at mid-afternoon and deal-making in the tech sector.

Toronto's S&P/TSX composite index took off 143.51 points in the opening half-hour to 8,416.02

The rally has been especially beneficial for the financial sector, which has soared 28% over the six days, sparked by news that American banks Citigroup and Bank of America were profitable in the first two months of this year.

In Canadian economic news, wholesale sales declined 4.2% to $41.1 billion in January. Statistics Canada said the drop was due largely to lower activity in the automotive products sector.

The TSX financial sector declined, with TD Bank down 58 cents to $42.95 and Manulife Financial fell 21 cents to $13.59.

The energy sector was lower ahead of U.S. inventory figures coming out later in the morning.

EnCana Corp. stepped back 61 cents to $50.89 while Suncor Inc. moved down $1.08 to $32.17.

Libya's National Oil Company says it will buy Canada's Verenex Energy Inc., matching a $394-million dollar U.S. bid by a subsidiary of the China National Petroleum Corp.

Verenex has operations in Libya's Area-47, a region estimated to hold roughly 2.15 billion barrels in crude oil reserves. Its shares dipped two cents to $9.30.

The gold sector was down, as Barrick Gold Corp. faded 97 cents to $35.64.

Allied Nevada Gold Corp. which is working to get the Hycroft project into commercial production, says its annual net loss increased last year to $79.6 million U.S., up from $11.3 million U.S. in 2007. The company reported no revenues for last year or the prior year and its shares were unchanged at $5.25 Canadian.

The base metals sector stepped back, as Teck Cominco Ltd. lost 19 cents to $5.06.

The Canadian dollar was ahead 0.23 cents at 78.96 cents U.S.

BAYSTREET

Of the 13 TSX subgroups, all but two were in negative territory to begin the session. Energy was lower by 3.1%, materials off 2.6% and gold was down 2.5%.

Only two subgroups provided some spark; consumer staples were ahead 0.9% and consumer discretionary stocks gained 0.4%.

The TSX Venture Exchange was down 2.13 points to 850.99, while the Nasdaq Canada index eased off 12.30 to 409.17.

ON WALLSTREET

The Dow Jones Industrials average stumbled 83.07 points to 7,312.63. The much-broader S&P 500 lost 5.37 points to 772.75, while the tech-laden Nasdaq eked out a gain of 0.91 points to 1,463.02.

Wednesday's decline was broad-based with only minor gains coming from consumer, health care and utilities stocks.

The Wall Street Journal reported that International Business Machines Corp. is in preliminary talks to buy Sun Microsystems Inc. for at least $6.5 billion U.S. in cash.

IBM and Sun both make computer systems for corporate customers, and the newspaper said a purchase of Sun would help IBM in the finance and telecommunications markets. Sun stock soared $3.09 or 60% to $8.06 U.S. while IBM slipped $2.14 U.S. to $90.77 U.S.

After slashing rates to zero, investors will focus on how the Fed intends to spend funds to get credit flowing to the economy once again. It could do so by buying assets from banks to help them recapitalize.

Investors also took in news that U.S. consumer prices rose in February by 0.4%, the largest amount in seven months as gasoline prices surged again and clothing costs jumped the most in nearly two decades.

Core inflation, which excludes food and energy, rose 0.2% in February, slightly higher than the 0.1% rise economists expected.

China has rejected Coca-Cola Co.'s $2.5-billion U.S. bid to buy major China's Huiyuan Juice Group Ltd. in a closely watched case that stirred nationalist opposition to the sale of a successful homegrown brand to foreigners. The Commerce Ministry rejected the purchase on anti-monopoly grounds.

The April crude contract on the New York Mercantile Exchange backed off 53 cents to $48.63 U.S. a barrel

The April bullion contract on the New York Mercantile Exchange moved down $13.80 to $903 U.S.