Toronto's main stock index tumbled on Monday on heightened fears about euro-zone debt contagion and reports that a U.S. congressional committee would miss a deadline for a deficit reduction plan.
The S&P TSX Composite Index slid 107.72 – after being down more than 200 points -- to end the day at 11,784.72
The Canadian dollar lost 0.95 cents, trading at 96.39 U.S. cents. It was trading at 99 U.S. cents just a week ago.
The Toronto market tumbled 384 points or 3.1% last week as investors become more wary of making bets because of the uncertainty surrounding the debt crisis and frustration over an apparent lack of recognition by euro zone leaders that time is running out and the available options for dealing with it dwindle.
Suncor Energy was the biggest drag on energy issues, tumbling 1.8% to $30.94.
Mining stocks sagged as gold and copper prices fell sharply.
Base metal issues fell as copper prices plummeted to their lowest levels in nearly a month on fears of a European slowdown and warnings from China about gloomy global growth prospects.
Tech Resources was the biggest laggard, tumbling 1,3% to $34.69.
Gold extended last week's slide, swept lower by a U.S. dollar that gained on a flight to safety.
Goldcorp Inc was down 0.8% at $51.46, much in keeping with the overall gold subsector.
In Canadian corporate news, Valeant Pharmaceuticals International Inc. says it has signed an agreement to acquire iNova, a private Australian pharmaceutical group in a deal that could be worth as much as $714 million. Valeant shares added 27 cents, or 0.6%, to $44.02.
Aecon Group Inc. said it has a preliminary agreement worth $250 million to do interior work on a new process mill at the Potash Corp, mine site in Saskatchewan. Its shares fell 1.7% or 17 cents to $10.06.
Fairfax Financial Holdings Ltd. has joined the bidding for Prime Restaurants Inc. with an offer of $71 million for the company that operates such eateries as East Side Mario's, Casey's and D'Arcy McGee's. Fairfax shares added $5.25 to $426.72, while Prime shares were up 10.4% or 72 cents to $7.65.
Prime says it solicited the offer from Fairfax under a provision of its agreement with Cara, which offered last month to pay $59 million for the company. Under its agreement with Prime, Cara now has five business days to submit another bid or back away and receive a termination fee.
Economically speaking, Statistics Canada reported that wholesale sales increased for a fifth consecutive month in September, rising 0.3% to $48.7 billion. Gains in the food, beverages and tobacco products subsectors were partially offset by drops in the machinery, equipment and supplies’ sectors.
ON BAYSTREET
The TSX Venture Exchange subtracted 52.65 points to 1,555.02, while the Nasdaq Canada index faded 9.49 points to 390.04.
All but three of the 14 Toronto subgroups ended the day downward. Global base metals slid 1.9%, metals and mining 1.8% and industrials 1.7%.
The three gainers were health-care, up 1.5%, while consumer staples and telecoms progressed a modest 0.2% each.
ON WALLSTREET
In New York, the selloff on Wall Street continued Monday, with the Dow sinking as much as 300 points at times, as investors remained on edge about the lack of progress leaders have made solving U.S. and European debt problems.
By the final bell, however, he Dow Jones Industrials had struck off 248.85 points, or 2.1%, to 11,547.30
The S&P 500 sifted off 22.67 points, to 1,192.98, while the Nasdaq Composite fell 49.36 to 2,523.14
All 30 Dow stocks were in the red, with the blue-chip index sliding into negative territory for the year. The S&P 500 and Nasdaq are already both down roughly 5% for the year. Only five of the S&P 500 showed even modest gains.
The selling was broad, with financial shares among the biggest losers. Shares of JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America were all down between 2.8% and 6%.
Elsewhere, Gilead Sciences said Monday it plans to buy drug developer Pharmasset for $11 billion U.S. Shares of Pharmasset soared nearly 85%, while Gilead shares fell 10%.
LinkedIn's shares dropped roughly 7% as its lockup period expired Monday. Pre-IPO investors can now sell stock.
Shares of Hong Kong-based Focus Media, a firm with in-store advertising displays in China, fell 44%, after the activist hedge fund Muddy Waters issued a report questioning the company's accounting.
Hewlett-Packard was on tap to report results after the closing bell.
Investors are growing increasingly concerned that Congress's failure to act could cause Moody's and Fitch to consider downgrading U.S. debt, following S&P's decision in August to take away its AAA rating.
Congress' super committee, which had been given extra powers to tackle the U.S.'s seemingly intractable debt problems, is expected to admit Monday that it could not agree on $1.2 trillion U.S. in budget reductions.
Meanwhile, investors couldn't take any solace from Europe. Intensifying worries about the euro-zone debt crisis pummeled European markets.
Moody's issued a warning on France's creditworthiness Monday, saying that rising interest rates on French government debt caused the difference in yield between French and German 10-year bonds to widen more than 200 basis points last week -- a record for the euro-zone.
Economically speaking, the U.S. National Association of Realtors on Monday said existing home sales rose 1.4% to a seasonally adjusted annual rate of 4.97 million from 4.9 million in September. Economists had anticipated a decline to an annual rate of 4.8 million in October.
The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.96% from 2.01% late Friday.
Oil for January delivery slipped 50 cents to $97.17 U.S. a barrel.
Gold futures for December delivery lost $48.60 to $1,676.40 U.S. an ounce.
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