The Toronto stock market was off the worst levels of the day but still down Monday afternoon in a commodity-stock led downturn reflecting investor concern about the timing of an economic recovery.
Toronto's S&P/TSX composite index had tumbled almost 200 points in early trading but by the close was down 20.17 points to 10,549.12
The rally that began in early March has boosted the TSX by almost 40% with commodity stocks showing the biggest improvement on high hopes for an economic turnaround by late this year or early next.
The energy sector has run up almost 80% while the base metals sector has soared about 300%.
The TSX energy sector was the leading declining group Monday. Decliners in the energy sector included EnCana Corp., down 46 cents to $60.74.
Elsewhere in the TSX energy sector, Addax Petroleum Corp. shares jumped $3.75 to $39.75 - or 10.4% - after acknowledging rumours of talks with a potential buyer. Addax responded after South China Morning Post, an English language newspaper, reported China Petroleum and Chemical Corp. is working on a bid to acquire the company for $8 billion.
The TSX base metals sector stepped back as Teck Resources Ltd. moved down two cents to $19.63.
The gold sector was up slightly.
The financial sector was down, as but Manulife Financial lost 18 cents to $23.92.
In corporate news, Angiotech Pharmaceuticals Inc. surged 65 cents Canadian or 33.7% to $2.58 after it announced the U.S. Food and Drug Administration has granted clearance for its Option Inferior Vena Cava Filter in the United States. The filter is used for the prevention of recurrent pulmonary embolism.
Air Canada shares picked up two cents to $1.41 after the carrier said that economic weakness and the threat of the H1N1 virus depressed passenger traffic across its system in May, dropping it by 10.3% year-over-year.
Epcor Power L.P. an Edmonton-based electricity producer with power plants in Canada and the United States, says it is cutting distributions on its partnership units to 44 cents a quarter from 63 cents a quarter to save cash. Its units were down 26 cents to $13.42.
On the economic front, Canada Mortgage and Housing Corp. said that the annual rate of housing starts increased to 128,400 in May from 117,600 in April. CMHC said the increase was broadly based, encompassing both single- and multiple-family homes.
The Canadian dollar regained 0.29 cents to 89.65 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, eight were in positive country late in the trading session. Consumer staples led the way, up 0.9%, gold and consumer discretionaries were ahead about 0.5%.
Of the five trailing groups, metals and mining were the worst off, at 1.6%, followed by energy, down 1.1% and information technology, settling back 0.6%
The TSX Venture Exchange fell back 6.17 points to 1,131.82 while the Nasdaq Canada Index went lower by 6.19 points to 782.65
ON WALLSTREET
In New York, stocks erased losses Monday afternoon, turning higher, as investors scooped up bank and consumer stocks in an attempt to get the three-month rally back on track.
The Dow Jones Industrials average fought its way from more than 100 points in the red in the morning, to finish ahead 1.36 points to 8,764.49
The S&P 500 index retreated 0.95 points to 939.14, while the Nasdaq Composite Index finished off seven points, to 1,842.40.
Stocks were weaker through most of Monday's session as investors showed caution after a rally that has propelled the Dow off of 12-year lows hit in early March. The Dow has risen in 11 of the last 13 weeks, climbing 32.2% as of Friday's close. That's the blue-chip average's best 13-week run in 26 years.
The other major gauges have also rocketed since March 9. Since hitting a more than 12-year low, the S&P has gained 39% as of Friday's close. The Nasdaq has rallied 45.8% as of Friday's close, since bouncing off of a six-year low.
All three major indexes had been lower throughout the session, but stocks managed to turn higher on optimism about the bank sector
A variety of consumer stocks advanced, including Dow components Home Depot and Walt Disney.
Banks were in focus Monday. The 10 banks that were required to raise a collective $75 billion U.S. as a result of the government "stress tests" have to submit detailed plans by Monday.
Bank of America, Morgan Stanley and PNC Financial Services are among the companies that have already met or exceeded requirements.
In addition, the government is expected to announce this week which banks are sufficiently capitalized to pay back the TARP funds they accepted in the fall.
Chrysler was expected to exit bankruptcy later Monday, unless the Supreme Court intervened and grants a stay in the sale of the automaker's assets to Fiat.
A top Obama administration lawyer has urged the Supreme Court to let the bankruptcy go through.
Several economic reports are expected this week. For example, on Tuesday, the government will release its wholesale inventories report for April, and a decrease of 1% is expected, according to a consensus of economists surveyed by Briefing.com.
Fidelity and private-equity firm KKR are teaming up to give customers of the mutual fund access to initial public offerings of KKR companies.
The global airline industry is likely to lose $9 billion U.S. this year due to weaker demand and the impact of the recession, according to trade group the International Air Transport Association.
Treasury prices were mixed, with the yield on the benchmark 10-year note holding at 3.83%, little changed from Friday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for July delivery fell 35 cents to settle at $68.09 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery fell $10.10 to settle at $952.50 U.S. an ounce.
Dow finishes flat
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