The TSX ticker is shown in Toronto on May 10, 2013. THE CANADIAN PRESS/Frank Gunn

TORONTO - Mixed economic news in the U.S. and reports of high provisions for credit losses at two Canadian banks helped drive Canada's main stock index to a small loss at the close of trading Tuesday.

The S&P/TSX composite index was down 9.16 points at 16,617.48 after gaining 108.79 points on Monday.

In New York, the Dow Jones industrial average closed down 60.02 points at 28,248.44.

The S&P 500 index was up 12.34 points at 3,443.62, while the Nasdaq composite was up 86.75 points at 11,466.47.

Most stocks on Wall Street had been edging higher early Tuesday after the United States and China said they had held constructive talks as they negotiate how to implement their "Phase 1" deal, which sets a truce in their ongoing trade war.

But markets then fell back after a report showed that U.S. consumer confidence unexpectedly dropped this month, contrary to economists' forecast for a strengthening.

"On the China trade front, they reiterated the goal of reaching their prior negotiated targets, which means we could be expecting a strong second half in terms of trade, which would be a positive for a lot of different sectors,'' said Craig Jerusalim, portfolio manager at CIBC Asset Management.

Adding to the economic confusion, he said, were U.S. new home sales, reported on Tuesday at a seasonally adjusted annualized rate of 901,000 homes in July, versus market consensus of 785,000 units.

Market watchers in Canada were focused on earnings reports from Bank of Montreal and the Bank of Nova Scotia.

"BMO exceeded consensus earnings expectations with strong cost control and that largely offset their higher loan loss provisioning," said Jerusalim.

"While Scotiabank couldn't overcome their higher credit charges, although they're saying their provisions for credit losses have largely peaked."

BMO shares gained $4.38 cents, or 5.7 per cent, to $81.23, while Scotiabank fell 38 cents, or 0.67 per cent, to $56.10.

Shares rose for the rest of the Big Six banks. Royal Bank of Canada and National Bank report fiscal third-quarter results on Wednesday, while Toronto-Dominion Bank and CIBC report on Thursday.

Despite the strong U.S. housing numbers, Canadian wood products companies led the materials sector to a losing day on Tuesday.

Canfor Corp. fell 72 cents or almost four per cent to $17.46 and West Fraser Timber Co. Ltd. was down $2.55 or 3.5 per cent to $71.17.

"It's a little counterintuitive but (there's been) a really strong run, so probably a little profit-taking in that sector," said Jerusalim.

The two companies recently touched 52-week-high share prices thanks to record high lumber and panelboard prices.

Gold company shares also helped drag down the materials sector as the December gold contract fell US$16.10 to US$1,923.10 an ounce.

The technology sector was up, led by Shopify Inc. with a $44.18 rise to $1,365.11.

The Canadian dollar traded for 75.79 cents US compared with 75.72 cents US on Monday.

Energy company shares were mixed despite the October crude oil contract rising 73 cents to settle at US$43.35 per barrel.

Two of the most active companies in Toronto were oilsands producer Canadian Natural Resources Ltd., up 12 cents to $26.79, and pipeline provider Enbridge Inc., down 32 cents to $43.04.

The October natural gas contract was down two cents at US$2.60 per mmBTU.

The September copper contract was up less than a penny at US$2.93 a pound.

This report by The Canadian Press was first published Aug. 25, 2020.

Companies in this story: (TSX:BMO, TSX:SHOP, TSX:BNS, TSX:RY, TSX:TD, TSX:CM, TSX:NA, TSX:WFT, TSX:CFP)

Note to readers: This is a corrected story. An earlier version cited the incorrect month for the natural gas contract.

News from © The Canadian Press, 2020