The Toronto stock market moved lower on Monday as commodity prices weakened and investors look to the start of the second-quarter corporate earnings season for clues on how the U.S. economy is performing.
The S&P TSX Composite Index got to within sight of breakeven before the closing bell, but fell 4.69 points short at 11,565.76
The base metals sector declined, as the September copper contract on the New York Mercantile Exchange was down five cents to $3.01 U.S. a pound. Teck Resources lost $1.14 to $34.46 while Western Coal Corp. dipped seven cents to $4.15.
The TSX energy sector was down as a strengthening U.S. dollar helped take the August crude contract on the Nymex down $1.22 to $74.87 U.S. a barrel. Canadian Natural Resources declined two cents to $36.79 while Canadian Oil Sands Trust fell 45 cents to $27.16.
The gold sector was off as Centerra Gold lost 11 cents to $12.10.
Shares in Alimentation Couche-Tard Inc. rose 51 cents to $19.86 as the convenience store chain extended the deadline for its hostile takeover offer for Casey’s General Stores in the U.S. to Aug. 6. The Montreal-based company says 9.8 million or 19.2% of Casey’s shares were tendered by the previous deadline on Friday.
Pengrowth Energy Trust is going after full control of Monterey Exploration Ltd. in a deal that valued the Calgary-based oilpatch junior at about $375 million. Pengrowth currently owns more than 18% of Monterey, a gas explorer and developer in the Montney formation in the Groundbirch area of northeast British Columbia. Pengrowth units lost 67 cents to $9.61 while Monterey shares soared $3.46 or 80.8% to $7.74.
Loblaw Co. workers in Ontario have overwhelmingly voted to give their union authority to call a strike against Canada’s largest grocery chain if negotiations don’t improve after months of stalled talks. The parties have been in a legal strike or lockout position since Saturday.
Negotiations are scheduled to resume next Monday and Loblaw shares slipped 18 cents to $39.80.
The Canadian dollar was 0.31 cents lower at 96.45 cents U.S.
ON BAYSTREET
Nine of the 14 TSX subgroups were lower on the day. Global base metals descended 2%, while metals and mining lost 1.6% and health-care stocks fell 0.8%.
Consumer staples led the five gainers, picking up 1.3%. Telecoms improved 0.7% and information technology stocks tacked on 0.6%.
The TSX Venture Exchange recovered 0.58 points to 1,370.13 while the Nasdaq Canada index was 0.99 points to the good at 623.56
ON WALLSTREET
In New York, blue chips ended higher and the broader market meandered Monday, as investors geared up for the start of the quarterly reporting period, following the biggest week of stock gains in a year.
The Dow Jones industrial average finished ahead 18.24 points to 10,216.27
The S&P 500 index stepped forward 0.79 points to 1,078.75. The Nasdaq composite index added 1.91 points to 2,198.36
Stocks slumped in the morning, turned mixed in the afternoon, before ending little changed, with just the blue chips in the plus column. Microsoft, Intel and select tech shares managed gains, but the stronger dollar dragged on commodity prices and the underlying shares.
Last week, all three major indexes added more than 5% as investors dug back in on anticipation of a strong corporate reporting period following a two-month selloff. Whether the gains were just a bounce after the battering or a new move higher will largely be dependent on what companies have to say in the next few weeks.
Second-quarter profits will likely top forecasts, with Thomson Reuters forecasting a 27% rise from a year earlier. But guidance will be at the forefront of investors' minds, and Dow noted that companies will hardly be willing to go out on a limb considering the questions still surrounding the economic recovery and the impact of the European debt crisis.
After the close, railroad operator CSX reported higher-than-expected quarterly sales and earnings, sending shares up in extended-hours trading.
Dow component Alcoa becomes the first major company to report quarterly results later Monday when it releases its second-quarter figures. The aluminum maker is expected to have earned 12 cents U.S. per share after reporting a loss of 26 cents U.S. per share a year earlier. Alcoa shares lost less than 1% ahead of the report.
Four other Dow names report this week: Intel on Tuesday, JPMorgan Chase on Thursday and General Electric and Bank of America on Friday.
BP is closer to containing the Gulf of Mexico spill and is also reportedly in talks to sell itself or at least some of its assets.
BP shares jumped 8% after multiple published reports said U.S. oil behemoths Exxon Mobil and another big firm, likely Chevron have sought government approval to make a bid for U.K.-based BP that could be worth $150 billion U.S.
Separately, reports said that a deal with Houston-based Apache could be in the works to sell its stake in the Prudhoe Bay project in Alaska for as much as $10 billion U.S.
In addition, the company said it has made progress with the latest capping system and that the relief well it is drilling should be usable by mid-August, in line with earlier projections.
Insurance brokerage Aon Corporation is set to buy outsourcing company Hewitt Associates in a $4.9-billion U.S. cash-and-stock deal. Shares of Hewitt jumped 32%, while Aon shares lost 7%.
Playboy shares rallied 39% after founder Hugh Hefner proposed to take the company private. Following the announcement, rival Penthouse said it would place a bid.
Weyerhaeuser shares jumped 8.3% after the wood products company said it will pay a special dividend of $5.6 billion U.S. -- a step required as it transitions into becoming a real estate investment trust.
Congress plans to resume its work on financial reform this week after it took a summer recess on July 2. A key Republican senator, Scott Brown, announced his support for the Wall Street reform bill on Monday, placing Senate Democrats within one vote of getting around a filibuster and passing the bill.
The final bill includes measures to strengthen consumer protection, shine a light on complex financial products, create a new process for closing so-called "too-big-to-fail" firms, and making them stronger to prevent such failure.
Treasury prices were a bit higher, lowering yields on the 10-year note to 3.05% from Friday’s 3.06%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil moved lower by $1.27 to $74.82 U.S.
Gold prices skidded nine dollars to $1,200 U.S. an ounce.
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