Toronto stocks remained slightly lower on Monday and moved further off the 11 1/2-month high from last week. Weakness in the telecom sector has outweighed gains for technology stocks.
The S&P TSX Composite index let go of 21.34 points to 11,424.61. The index reached its highest level in nearly a year above 11,500 last week.
Telecommunications stocks were down, as Rogers Communications declined 2.4% to $29.77, BCE was down 1.5% to $26.36, Telus dropped 1.9% to $33.86 and Manitoba Telecom Services lost 1.1% to $32.41.
Technology stocks gained, as Research in Motion was up 1.5% to $90.60 after the stock's target price was raised $93 from $87 at Kaufman Bros.
Health-care stocks were up, with MethylGene rallying 13% to 30 cents after the company said that the FDA has lifted the partial clinical hold placed on MGCD0103, the Company's proprietary selective histone deacetylase inhibitor for cancer.
In other corporate news, Potash dropped 1.6% to $100.20 after the company lowered its full-year earnings guidance to a range of $3.25-$3.75 per share, compared to its earlier estimates in the range of $4.00-$5.00 per share.
The stock was downgraded to "hold" from "buy" at Soleil Securities Group.
High River Gold Mines dropped 4.7% to 41 cents. The company announced the resignation of Nikolay Zelenskiy as a Director and Chief Executive Officer of the company effective September 22.
Calfrac Well Services slipped 0.4% to $15.85 after the company said it has agreed to acquire Century Oilfield Services, a privately-held fracturing services company based in Calgary. The stock and cash deal is worth about $90 million.
Air Canada dropped 1.1% to $1.75 after the company said that it has reached a settlement with the U.S. Department of Transportation that will allow the resumption of NHL sports charter flights for the 2009-10 season to cities in both Canada and the U.S.
Thomson Reuters was down 1.7% to $36.11 after the company announced a deal to acquire Hugin Group. Terms of the deal were not disclosed.
TransAlta Corp. was up two cents to $21.53 after announcing it has extended its offer to acquire all of the issued and outstanding common shares of Canadian Hydro Developers for $4.55 per share in cash to October 2.
The Canadian dollar dropped 0.76 to 92.76 cents U.S.
ON BAYSTREET
All but four of the 14 TSX subgroups were lower. Telecoms were off 1.6%, real-estate down 1% and gold stumbled 0.8%.
The four gainers were led by information technology, surging 1.6%, health-care, 0.7% healthier and metals and mining, mightier by 0.3%.
The TSX Venture Exchange plunged 16.80 points to 1,265, while the Nasdaq Canada index actually gained 3.77 points to 832.89.
ON WALLSTREET
In New York, falling commodity prices and financial shares dragged on blue chips Monday, keeping the market choppy after a more than six-month advance.
The Dow Jones Industrials slid 41.34 points to 9,778.86. The S&P 500 index fell 3.64 points, to 1,064.66. The Nasdaq composite index picked up 5.18 points to 2,138.04.
Stocks managed to hit fresh 2009 highs Friday as investors continued to shake off calls for a September selloff. But with the major indexes up substantially since March, stocks are vulnerable to a pullback, analysts said.
Since bottoming at a 12-year low March 9, the S&P 500 has gained 58% and the Dow has gained 50%, as of Friday's close. After hitting a six-year low, the Nasdaq has gained 68%.
Stocks have risen during those 6-1/2 months due to slowly improving economic news and extraordinary amounts of fiscal and monetary stimulus. But analysts say that the run has been too much, too soon.
PC maker Dell is buying Perot Systems a provider of information technology services, in a $3.9-billion U.S. all-cash deal.
Dell shares fell 4.5% in Monday trading, while Perot Systems rose 65%.
AIG shares rallied 20% after a Congressional report said the company has stabilized although it was unclear whether it would ever be able to pay back its federal bailout. AIG received as much as $182 billion U.S. from Treasury and the Federal Reserve at different points in time over the last year.
Home builder Lennar reported a wider quarterly loss Monday morning, but also said it will be profitable next year if the economy remains stable. Shares fell 3%.
Among the decliners, Dow financial stocks American Express, Bank of America and JPMorgan Chase all declined.
Coca-Cola, McDonald's, Caterpillar and Exxon Mobil were among the Dow's other losers.
The Federal Reserve, meeting Tuesday and Wednesday, is likely to hold short-term interest rates steady at historic lows near zero. Last week, Fed chief Ben Bernanke said the recession is likely over but the labour market still has a long way to go.
Over the weekend, President Obama said that job growth won't kick in until the end of the recovery, sometime next year.
Reports on housing and consumer sentiment are due later in the week. On Thursday, the Group of 20 leading developed and emerging countries will meet in Pittsburgh to discuss the global economy in the wake of the recession.
On the economic front, the August index of leading economic indicators rose 0.6%, according to a report from the Conference Board released Monday. That was short of forecasts for a rise of 0.7%, according to a consensus of economists surveyed by Briefing.com. LEI rose 0.6% in July.
Treasury prices were lower, thus raising the yield on the benchmark 10-year note to 3.48% from Friday’s 3.47%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil was down $2.33 to $69.47 U.S.
Gold prices were down five dollars to $1,005 U.S. an ounce.
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