TSX Closes in the Red

Barrick Gold to buy Randgold Resources in $18.3 billion deal

Canada's main stock index traded lower Monday despite a jump in energy and health-care stocks while crude oil prices hit a three-year high.

The S&P/TSX Composite Index was off 16.81 points at 16207.32.

Canada’s Barrick Gold (ABX) has agreed to buy Randgold Resources Ltd (RRS.L) in a $18.3 billion share deal to create the world’s largest gold company by value and output in an industry under investor pressure to put capital to good use. The new Barrick company, which will be listed in New York and Toronto, will own five of the world’s 10 lowest cost gold mines and will be valued at $24 billion including debt.

Canadian food retailer Empire Co Ltd. said on Monday it would acquire privately held grocer Farm Boy Inc for an enterprise value of C$800 million ($618 million) to increase its presence in Ontario. Ottawa-based Farm Boy, which specializes in “farm-to-table” wholesale, will be acquired from Berkshire Partners, following which it will be set up as a separate company within Empire’s structure.

On the economic front - Wholesale sales rose 1.5% to $63.9 billion in July, more than offsetting the 0.9% decline in June. Sales were up in four of seven subsectors, representing approximately 66% of total wholesale sales.

The Canadian dollar traded lower at 77.23 cents U.S. compared with an average of 77.42 cents U.S. on Friday.

ON BAYSTREET

The TSX Venture Exchange inched off 5.69 points to 714.22.

Three of TSX subgroups were traded in the green Monday, with energy better by 2.46%, health-care ahead 2.24%, and gold up 0.97%.

On the downside -- Metal stocks were off 2.15%, telecom issues shed 1.18% and consumer discretionary stocks were down 1.05%.

Gold prices edged higher Monday, boosted by a falling dollar. Gold for December delivery was recently up 0.3% to $1,205.30 a troy ounce on the Comex division of the New York Mercantile Exchange.

ON WALLSTREET

U.S. stocks closed mostly lower Monday as the U.S.-China trade war entered a new phase when tariffs on billions of dollars of products took effect. Investors were also looking ahead to the Federal Reserve’s two-day monetary policy meeting, which wraps Wednesday and is likely to result in another interest-rate hike.

The Dow Jones Industrial Average fell 181.45 points, or 0.7%, to 26,562.05 after closing at a record on Friday. The S&P 500 lost 10.31 points, or 0.4%, to 2,919.37. The Nasdaq Composite Index reversed earlier loss to rise 6.29 points to 7,993.25.

On Monday, Chinese officials fired back against the administration of President Donald Trump, accusing it of “trade bullyism” and pushing an “America First” agenda at the cost of international relations. The comments came as the latest exchange of tariffs took effect—10% tariffs on $200 billion worth of Chinese goods, which was met with $60 billion in tariffs on U.S. goods by China.

Michael Kors Holdings Ltd. (KORS) agreed to take control of Italian fashion icon Versace, three sources familiar with the matter told Reuters on Monday, adding that an official announcement would be made this week. Michael Kors fell 8.2%.

Sirius XM Holdings Inc. agreed to buy Pandora in a stock deal valued at $3.5 billion. Shares of Pandora slid 1.2% while Sirius slumped 10%.

On the economic data front, the Chicago Fed’s national activity index came in at 0.18 in August, unchanged with the previous month.

Crude-oil prices gained 1.7%, with Brent-crude futures up 2.2%, trading near their highest level in more than three years. The rise came as major energy producers declined to commit to increasing crude output to address expected supply disruptions at a closely watched producer meeting.

West Texas Intermediate crude rose 2.2% to $72.30 a barrel, while futures for Brent crude, the European benchmark, rose 2.7% to $80.38 a barrel.

The yield on the 10-year Treasury note rose 0.9 basis point to 3.078%, while the 2-year note yield edged up 0.4 basis point to 2.813%. The yield on the 30-year Treasury bond rose 0.4 basis point to 3.21%. Yields and debt prices move in opposite directions.