The Toronto stock market retreated Monday as major deals in the commodities and financial sectors failed to lift those influential indexes into positive territory.
The S&P TSX Composite Index moved downward 27.32 points to end the day at 12,929
The Canadian dollar slid 0.42 of a cent to 98.20 cents U.S.
Financial stocks were down after Scotiabank said it is paying $2.3 billion to buy up the shares it doesn’t already own in investment firm DundeeWealth. The acquisition will add a major wealth-management business to the Toronto-based bank’s stable of financial services operations.
Scotiabank lost 45 cents to $54.20, while DundeeWealth stock was up $1.28 at $20.75.
A hefty drop in shares of Manulife Financial Corp. also weighed on financials after Citigroup downgraded the insurance giant’s rating to "sell" due to a weak outlook for its U.S. operations and the risk of dilution in any further issuing of equity to raise money to pay down debt.
Manulife shares fell 47 cents to $14.88.
The metals and mining sector lost ground as prices moved slightly lower after an announcement Friday that China would tighten monetary policy, sparking fears that its economic growth could slow and thereby reduce demand for commodities.
In the petroleum industry, Shares in Imperial Oil eked out a gain of six cents to $37.82.
The December copper contract on the Nymex fell eight cents to $3.75 U.S.. Shares in Lundin Mining Corp. were down seven cents at $6.68.
In gold issues, Barrick Gold Corp. gained 37 cents to $51.08.
Meanwhile, shares of junior potash miner Potash One jumped more than 25% after announcing it has agreed to be taken over by Germany’s K+S Aktiengesellschaft in a friendly deal that values the company at $434 million.
BHP Billiton launched a hostile, $38.6-billion U.S. takeover bid earlier this year for Potash Corp. of Saskatchewan, the world’s largest potash producer, but the proposed deal was turned down by the federal government which ruled it would not be of net benefit to Canada.
It was unclear whether the Potash One deal would face the same scrutiny from Industry Canada, but the much smaller company’s support of the offer will likely help smooth acceptance.
Potash One shares gained 91 cents to $4.53, with over 39 million changing hands. PotashCorp shares gained 48 cents to $143.31.
In other Canadian corporate developments, technology licensing company Wi-LAN Inc. says it has initiated a lawsuit against Comcast Corp., Time Warner Cable Inc., and Charter Communications, claiming that each violates one of its patents in its cable systems and cable modem products.
Shares in the company lost six cents to $4.53.
There was no major economic news to report in Canada today.
Reports set to be released Tuesday and Wednesday include the Canadian consumer price index for October and retail sales for September. In the U.S., reports this week include October home sales, an update of consumer sentiment, and revisions to earlier estimates of the third-quarter gross domestic product.
Meanwhile, a report from the Conference Board of Canada released Monday forecasts that profits in three of six main Canadian industry sectors are expected to rebound strongly this year before a general weakening of economy activity again in 2011.
Profits in the food services, retail and accommodation sectors are expected to see profits rebound by more than 20% this year, according to the report published by the Conference Board of Canada in collaboration with Business Development Bank of Canada.
ON BAYSTREET
The TSX/Venture Exchange advanced, however, 18.18 points to 2014.05, while the Nasdaq Canada index also moved higher 10.19 points to 731.96.
In Toronto, eight of the 14 subgroups were higher by day’s end. Health-care was strongest of the gainers, putting on 1.9%, while utilities picked up 0.9%, while gold added 0.8%.
The half-dozen laggards were weighed mostly by real-estate, energy and financials, each down 0.8%.
ON WALLSTREET
In New York, stocks pared earlier losses Monday afternoon as bank stocks came under pressure following news about an insider trading probe on Wall Street.
The Dow Jones Industrials fell short of breakeven by 24.97 points to end the day at 11,178.60.
The S&P 500 was down 1.89 points at the final bell to 1,197.84. The tech-rich Nasdaq Composite Index progressed 13.90 points to 2,532.02.
The declines were broad-based, with 26 of 30 Dow components in the red. Bank of America was the Dow's biggest loser, dropping 3.4%. Other bank shares -- including Citigroup, JPMorgan and Wells Fargo -- were also sharply lower.
Goldman Sachs was the S&P 500's biggest loser, with shares tumbling 4% on a report over the weekend that investigators are looking at possible insider trading allegations tied to the firm's dealings in transactions including a health-care merger.
Trading could be choppy this week, with many market participants taking time off ahead of the Thanksgiving holiday. Trading volume was on the light side Monday, but still within normal range. Below average trading volume can contribute to volatility. All U.S. markets will be closed Thursday.
On Sunday, Irish Prime Minister Brian Cowen formally requested substantial financial assistance from the European Union and the International Monetary Fund. The group is now working to hammer out final details of a rescue package worth tens of billions of dollars.
Stocks eked out gains Friday, ending a volatile week with a whimper. The volatility was driven by nervousness over China's efforts to temper bank lending and the potential bailout for Ireland.
Netflix shares jumped 7.7% in afternoon trade after the company announced a streaming-only video service for $7.99 U.S. a month. The streaming plus DVD rental service price will increase to $9.99 U.S. a month.
Green Mountain Coffee announced late Friday that it will restate earnings for the last three fiscal years and the first three quarters of the current fiscal year, because of accounting errors. Shares surged more than 16% Monday after the company said those issues had been resolved.
Novell shares gained 6.5% after the software maker said it had agreed to be bought by Attachmate for $2.2 billion U.S.
Dow component Hewlett-Packard was among the companies due to report quarterly results after the market closes. Analysts expect the computer products maker to post fiscal fourth-quarter earnings of $1.27 U.S. per share, on sales of $32.75 billion U.S., according to Thomson Reuters.
Shares of energy producers Exxon and Chevron were both down almost 2% as oil prices fell.
The price on the benchmark 10-year U.S. Treasury moved up, lowering the yield to 2.81% from 2.87% late Friday. Treasury prices and yields move in opposite directions.
Oil dipped 16 cents a barrel to $81.69 U.S. The price of an ounce of gold moved up $12.42 to $1,365.90.
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