The Toronto stock market got thwacked at Monday’s open amid concerns that Spain will need a full-scale sovereign bailout while traders took in two major acquisitions in the Canadian energy sector.
The S&P/TSX Composite index tumbled 185.37 points, or 1.6%, soon after Monday’s opening bell to 11,437.54
The Canadian dollar faded 0.52 cents to 98.09 cents U.S.
Among stocks to watch this morning, China National Offshore Oil Company is picking up Calgary-based oil and gas producer Nexen Inc. for $15.1 billion U.S. in cash. CNOOC is paying $27.50 a share, a 61% premium on the closing price of its shares on Friday at the New York Stock Exchange.
And Talisman Energy Inc. is selling its 49% interest in U.K. North Sea assets to Chinese firm Sinopec Corp. for $1.5 billion.
In other corporate developments, regulatory filings show that investor Prem Watsa now has a 9.9% stake in BlackBerry maker Research in Motion Ltd.
Watsa is the CEO of insurer Fairfax Financial Holdings Ltd. He had earlier reported a 5.12% holding in RIM. Watsa's stake was valued at about $356.2 million, as of Friday's closing on the TSX.
ON BAYSTREET
The TSX Venture Exchange retreated 22.54 points to 1,173.65. The Nasdaq Canada index dipped 10.42 points to 329.25.
All 14 Toronto subgroups got roughed up soon after the opening bell. Metals and mining stocks surrendered 3.9% of their strength, while global base metals fell 3.1% and health-care issues were 2.4% to the bad.
ON WALLSTREET
Stocks plunged at the open Monday, with the Dow sinking more than 200 points, as worries that Spain may need a full-blown bailout sparked a global selloff.
The Dow Jones industrial average declined 231.59 points, or 1.8%, in the first hour to 12,590.98
The S&P 500 gave back 24.90 points to 1,337.76. The Nasdaq fell 68.71 points to 2,856.59
McDonald's shares slipped after the fast-food restaurateur missed earnings and revenue expectations, citing a slowing global economy.
Hasbro's stock rose after the toymaker reported second-quarter earnings beat analyst expectations. But the gains were limited as the company's revenue dropped 11% and missed Wall Street's forecast.
Shares of Halliburton dropped after the energy services company posted better-than-expected earnings as strong drilling activity in international markets offset a slowdown in North America.
Shares of Nexen jumped more than 50% after China's state-owned oil producer CNOOC agreed to buy the Canadian oil and gas producer for $15.1 billion U.S.
Shares of GenOn and NRG Energy climbed after the NRG agreed to buy the Houston-based wholesale power provider in an all-stock deal worth about $1.7 billion U.S.
RailAmerica's stock was higher after Genesee & Wyoming agreed to buy the company for $1.39 billion U.S. in cash.
The selling was widespread, with oil prices tumbling nearly 3% and copper prices skidding 3%. The euro weakened further, falling as low as $1.207 U.S.
Investors flocked to traditional safe havens, such as U.S. Treasuries, where the 10-year yield hit a fresh record low of 1.395% before recovering. German 10-year yield also fell to a record low of 1.127%.
The debt crisis plaguing Europe is taking a toll on Spain's regional economies, with at least one region, Valencia, said to have requested emergency funding last Friday. A second eastern region, Murcia, denied reports that it was gearing up for its own request.
Euro-zone finance ministers finalized initial bailout terms for Spanish banks, but observers fear that may not be enough.
The yield on the 10-year Spanish bond jumped to a euro-area record high of 7.565% from 7.267% late Friday. Spain's leaders have said that 7% is an unsustainable level. It's also a level that flashes the first bailout signals.
The Bank of Spain also reported that the nation's economy contracted by 0.4% in the second quarter -- that's the third quarterly contraction and shows the euro-zone's fourth-largest economy could be mired in recession for some time.
The price on the benchmark 10-year U.S. Treasury strengthened, pushing the yield down to 1.42% from 1.46% late Friday. Treasury prices and yields move in opposite directions.
Oil for September delivery staggered $3.79 to $88.04 U.S. a barrel.
Gold futures for August delivery dropped $11.80 to $1,571 U.S. an ounce.
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