The Toronto stock market stayed firmly in the red Monday near midday as investor pessimism about the state of the global economy continued to pressure stocks a day before the Bank of Canada's key interest rate announcement.
The S&P TSX Composite Index gave back 26.18 points to end the day at 11,543.47
The shift lower followed a rout of all major U.S. indexes Friday, when an abysmal consumer confidence report south of the border and some disappointing earnings from key U.S. companies heightened concerns that the global economic recovery is stalling.
Although the TSX also fell significantly on Friday, its loss paled in comparison to the drop on Wall Street.
Shares in gold companies lost ground, as shares in Goldcorp Inc. lost 62 cents to $41.82.
The Toronto energy sector edged up as shares in Suncor Energy Inc. added 20 cents to $32.53.
Financials fell following disappointing earnings reports from Citigroup and Bank of America on Friday. Shares in Bank of Montreal lost three cents to $61.42.
Base metals stocks fell as the September copper contract on the Nymex gained 1.55 cents to $2.95 U.S. a pound. This followed a big decline that routed base metals stocks on Friday. Shares in Teck Resources Ltd. lost 29 cents to $33.15.
In Canada, investors are awaiting the Bank of Canada's interest rate decision on Tuesday. The central bank is expected to raise its key lending rate by a quarter percentage point to 0.75%, another indication that Canada's economic recovery has so far been stronger and faster than in the United States.
In Canadian corporate news Monday, private equity firm Onex Corp. and the Canada Pension Plan Investment Board bid 2.87 billion pounds ($4.37 billion U.S.) for British engineering and manufacturing company Tomkins PLC. Shares in Onex added three cents to $25.10.
Qatar Airways has ordered three business jets from Canadian manufacturer Bombardier Inc., in a deal worth $122 million U.S. at list prices. Qatar Airways said it is still talking to Bombardier about buying its CSeries commercial jet, but was not able to conclude its deal at the Farnborough air show. Bombardier shares lost 31 cents or 6.5% to $4.43.
And Ivanhoe Mines Ltd. said it has added three more lenders, including Export Development Canada, to a group arranging a debt financing package for a huge copper and gold project in Mongolia. Shares in Ivanhoe added 23 cents to $17.35.
In economic news, Statistics Canada said Canadian investors sold $2.9 billion of foreign securities in May, the largest repatriation of funds from abroad since January 2010.
Meanwhile, non-resident investments in Canadian securities were up $23.2 billion, with government debt instruments attracting a major chunk. Foreign purchases of Canadian stocks nearly doubled in May to $5.3 billion, the largest inflow so far in 2010.
The Canadian dollar was 0.08 cents lower to 94.74 cents U.S.
ON BAYSTREET
Nine of the 14 TSX subgroups ended the day in positive country. Information technology issues led the way, gaining 1.8%, while utilities improved 1.3%, and health-care stocks picked up 0.9%.
The five laggards were weighed mostly by gold, down 1.7%, materials, off 1.4% and financials, sliding 1.1%.
The TSX Venture Exchange dumped 17.30 points to 1,362.31 while the Nasdaq Canada index was up 10.56 points at 615.98.
ON WALLSTREET
In New York, stocks rallied late Monday on optimism about corporate results due this week, though the major indexes closed off session highs as investors remain wary about the economy.
The Dow Jones industrial average greeted the final bell up 56.53 points to 10,154.43
The S&P 500 index moved higher by 6.37 points to 1,071.25. The Nasdaq composite index was positive by 19.18 points to 2,198.23.
Shares of IBM led gainers on the Dow. The technology giant is expected to report after the closing bell that sales and profits grew in the second quarter. Boeing also posted strong gains after the aerospace company was awarded a big contract.
The advance came after stocks had traded in a narrow range for most of the session. Investors said the market has been pulled between ongoing concerns about the economy and optimism about upcoming corporate financial reports.
Stocks were supported earlier in the day by strong earnings from oil services firm Halliburton, which reported an 83% jump in second-quarter profits. But gains faded after an industry group said its index of homebuilder confidence dropped to a 15-year low in July.
The housing news raised concerns that reports this week on mortgage applications and home sales could come in weaker than expected. A recent spate of disappointing reports on the job market, weakness in housing and consumer spending have raised concerns about the economy stalling later this year.
In addition, rating agency Moody's downgraded Ireland's sovereign debt, and signs emerged that international financial support for Hungary was waning.
Last week, a drop in consumer sentiment, along with weak earnings from financial firms Bank of America and Citigroup pressured stocks at the end of the week and dragged the Dow down by 261 points on Friday.
Investors are awaiting fresh hints about the economy as the quarterly earnings period kicks into full swing, with results from 122 companies on tap this week.
Of the companies that have reported so far, about 75% have beaten earnings expectations and 71% have topped revenue forecasts.
After the market close, IBM was among the many companies due to report results.
Other Dow components reporting this week are Microsoft, AT&T, Coca-Cola and American Express. In addition, Apple, Wells Fargo, Ford Motor and UPS are due to post results this week.
Shares of Halliburton rose more than 5% after the company posted an 83% jump in second-quarter profit.
Delta reported adjusted earnings per share for the most recent quarter that beat analysts' expectations. But shares of the airline fell 1.8% as investors responded to weaker-than-expected sales growth in the quarter.
Shares of Boeing gained after the company received a $9.1-billion U.S. order from Dubai-based airline Emirates for 30 of its 777-300ER aircrafts.
American International Group named Mark Tucker, the former CEO of Prudential, as head of it its Asian life insurance business.
Motorola climbed 4% after Nokia Siemens Networks said it plans to buy the majority of Motorola's wireless network division for $1.2 billion U.S. in cash.
BP was down nearly 5% after comments from a U.S. official raised questions about pressure levels in the ruptured well in the Gulf of Mexico.
Moody's Investors Service cut Ireland's government bond ratings to Aa2 from Aa1 on Monday, citing weakening growth prospects and mounting debt.
Meanwhile, talks between Hungary and the International Monetary Fund reached an impasse over a $25-billion U.S. aid package the country accepted in 2008 from the IMF and European Union.
On the economic front, the National Association of Home Builders said its index of builder confidence in the market for new, single-family homes fell in July to the lowest level since April 2009.
The Housing Market Index fell two points from a downwardly revised number in the previous month to 14 for July, according to NAHB.
NAHB chairman Bob Jones said in a statement that the decline in builder confidence reflects the expiration of a popular tax credit, tight credit conditions and persistently high unemployment.
Shares of Hovnainian, Toll Brothers and KB Home were all lower.
Treasury prices were lower, raising yields on the 10-year note to 2.96% from Friday’s 2.94%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil tacked on 51 cents to $76.52 U.S.
Gold prices shed six dollars to $1,184 U.S. an ounce.
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