The Toronto stock market was lower Monday as commodity prices stepped back following big gains last week while investors looked to the start of the U.S. first quarter earnings reporting season.
The S&P/TSX Composite Index collapsed 211.57 points, or 1.5%, to close at 13,996.86
The Canadian dollar was up 0.09 of a cent to 104.54 cents U.S. a day before the Bank of Canada makes its next announcement on interest rates. Traders widely expect the central bank to leave its key rate unchanged at 1% but will be looking to its accompanying statement for its take on the economy and the impact of a rapidly rising loonie, which started the year just above par with the U.S. dollar.
The energy sector was ahead as Suncor Energy was down $1.16 to $43.51 while Canadian Natural Resources gave back $1.72 to $45.56.
Crude prices are still up about 29% from mid-February to two-and-a-half-year highs amid a civil war in Libya and unrest in other Mideast countries.
Oil prices are key in assessments of the global economy. Not only are they stoking inflationary pressures and heightening expectations that the world’s leading central banks will be raising interest rates from super-low levels sooner than anticipated, but they are also weighing on economic activity.
The base metals sector was off while copper prices which were unchanged at $4.49 U.S. a pound following a jump of almost 6% last week. Equinox Minerals dipped 15 cents to $7.52 while First Quantum moved down $5.03 to $131.67.
The gold sector declined as Goldcorp Inc. faded $1.08 to $51.06.
American Bonanza Gold Corp. will acquire Barrick Gold Inc.’s 47.5% stake in the Iskut joint venture in northwestern British Columbia for an undisclosed amount. Its shares were down half a cent at 37 cents while Barrick declined $1.40 to $50.66.
In other corporate news, TimberWest Forest Corp. has signed an agreement to be bought by two Canadian pension funds for $1.03 billion cash. The timber and land management company said the acquisition by the British Columbia Investment Management Corp. and the Public Sector Pension Investment Board includes debt, and is equivalent to $6.48 per stapled unit. TimberWest units jumped $1.04 to $6.46.
Telus announced Monday that it has reached a tentative contract agreement with the Telecommunications Workers Union covering approximately 12,100 employees nationally. Details aren’t known and the TWU said it will recommend acceptance of the pact when it is put to the union membership for a vote in the coming weeks. Telus shares dipped 57 cents to $48.78.
Gran Tierra Energy Inc. said it will spend an additional $55 million in capital to develop recently purchased assets of Petrolifera Petroleum Ltd. in Colombia, Peru and Argentina.
The company said 2011 production is expected to range between 17,500 and 19,000 barrels of oil equivalent per day gross, which is below a previous estimate of 21,500 to 23,500 barrels released in December that excluded the Petrolifera assets and its shares declined 44 cents to $7.21.
ON BAYSTREET
The TSX Venture Exchange bowed 42.29 points to 2,346.50, while the Nasdaq Canada index eased 9.52 points to 757.54
In Toronto, all but one of the 14 subgroups were in the red by day’s end Gold and energy got pounded 2.6% each, while materials shed 2.5%.
Only a slight 0.04% gain by consumer staples kept things from being totally bleak.
ON WALLSTREET
In New York, stocks turned mixed Monday, with blue chips rising and the broader market erasing earlier gains, as investors await corporate reports due after the market closes and later this week.
The Dow Jones industrial average still held onto a gain of 1.06 points to 12,381.10 by the closing bell
The S & P 500 was off 3.71 points to 1,324.46. The tech-rich Nasdaq Composite Index docked 8.91 points, to 2,771.51
Stocks posted broad-based gains earlier in the session on a spate of deal news and a drop in oil prices following talk of a cease fire in Libya. But the tone turned more cautious in the afternoon, as investors were awaiting the early results of the first-quarter reporting period.
Alcoa, which is scheduled to report after the closing bell Monday, will be the first Dow stock to issue results. JPMorgan, another Dow component, and Google are also slated to post results later this week.
As of last week, earnings for companies in the S&P 500 are expected to be up around 11% versus the first quarter of 2010, according to estimates from Thomson Reuters. Revenues are seen rising 8% in the quarter.
In addition, the 2% pullback in oil prices weighed on shares of energy producers and industrial companies. Alcoa and Caterpillar dragged on the Dow, while Exxon Mobil and Chevron were also weak.
Endo Pharmaceuticals announced plans to buy American Medical Systems) for $2.9 billion U.S. in cash and stock. Shares of American Medical jumped 32%, while Endo stock rose 5%.
Communications services company Level 3 announced plans to buy rival Global Crossing in an all-stock deal valued at $3 billion U.S.
Shares of Tyco were up 3.5%, amid speculation that France's Schneider Electric is considering a bid for the Swiss industrial conglomerate.
On the down side, shares of Tenet Healthcare sank 13% as the company filed suit against Community Health Systems, which is pursuing a hostile takeover bid for Tenet.
Shares of major U.S. automakers Ford and GM were also under pressure. Ford fell 3%, while GM was down 2.8%.
Aluminum producer Alcoa is expected to report earnings of 27 cents U.S. per share after the market closes, according to analysts polled by Thomson Reuters.
There were no U.S. economic reports due Monday.
The price on the benchmark 10-year U.S. Treasury moved slightly, lowering yields to Friday’s 3.57%. Treasury prices and yields move in opposite directions.
Oil for February delivery gave back 0.91 to $109.39 U.S. a barrel.
Gold futures for June delivery fell $6.10 to $1,467.80 U.S. an ounce. Earlier in the session, the precious metal hit an intraday high of $1,478 U.S. an ounce.
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