Stock markets in North America scaled down Monday from earlier highs, on word that certain European countries faced downgrades on their debts.
The S&P TSX Composite still finished in the green 44.24 points to 12,119.33
The Canadian dollar slid 0.07 cents to 98.30 U.S. cents, a day before the Bank of Canada makes its next announcement on interest rates. The central bank is widely expected to leave its key rate unchanged at 1%.
The TSX energy sector ran up as Suncor Energy advanced 40 cents to $31.16 and Cenovus Energy climbed 41 cents to $33.50.
The base metals sector gained territory while March copper prices were up four cents to $3.62 U.S. on the Nymex. Prices ran up almost 10% last week after China, the biggest consumer of the metal, announced moves to ease lending and encourage growth. Teck Resources rose $1.12 to $38.99 and Quadra FNX Mining was up 65 cents to $11.35.
The financials sector was up while Royal Bank climbed 50 cents to $49.27 and TD Bank gained 68 cents to $73.43.
Industrial stocks also supported the Toronto market as Canadian Pacific Railway gained $1.54 to $63.85 and Canadian National Railways was up $1.06 to $79.86.
Among gold issues, Goldcorp Inc. has boosted its monthly dividend by 32% to 4.5 cents thanks to its strong cash flow. Its shares retreated 49 cents to $51.84.
In corporate news, Frontier Rare Earths Ltd. stock soared 20 cents or 19.1% to $1.25 after it reached an agreement with Korean government-owned Korea Resources Corp. to accelerate development of its Zandkopsdrift rare earth project in South Africa. Korea Resources also announced that it plans to form a consortium comprised of Korean companies to join the Frontier joint venture.
ON BAYSTREET
The TSX Venture Exchange faded 3.53 points to 1,553.25, while the Nasdaq Canada index increased 1.70 points to 395.93
Nine of the 14 Toronto subgroups gained ground, with metals and mining stocks leading the way, up 2.6%, global base metals adding 2%, and industrial stocks 1.3% stronger.
Gold weighed most heavily on the five laggards, off 1.1%, while materials skidded 0.6% and information technology issues downloaded 0.3%.
ON WALLSTREET
In New York, stocks pulled back from an early rally Monday afternoon, as investors turned cautious following reports that Standard and Poor's may put euro-zone nations on notice for possible downgrades.
After rising 1.5% earlier in the trading day, all three major indexes trimmed those gains
The Dow Jones Industrials was still positive 78.41 points to 12,097.80
The S&P 500 tacked on 12.80 points, to 1,257.08, while the Nasdaq Composite strengthened 28.83 points to 2,655.76
Bank stocks were among the biggest winners Monday, with JPMorgan Chase and Bank of America positing the best gains on the Dow. Shares of Citigroup, Morgan Stanley and Goldman Sachs were also gaining ground.
Shares of SuccessFactors Inc. surged after German software maker SAP agreed to buy the company for $3.4-billion U.S. in cash. Shares of Taleo, SuccessFactors' rival, also spiked.
Dollar General's stock edged higher after the company's quarterly profit topped expectations. The retailer also raised its guidance for the year.
Shares of Taiwanese phone maker HTC were down sharply ahead of a ruling on a key Apple patent suit. On Tuesday, a six-member panel at the International Trade Commission in Washington will rule on whether HTC's phones had violated two Apple patents.
Stocks logged robust gains last week after the Federal Reserve and ECB said they will work with other top central banks to support the global economy.
The Dow rallied 7% -- its biggest weekly gain since July 2009; while the S&P 500 climbed 7.4% -- its best weekly performance since March 2009. The Nasdaq rose 7.6%, delivering its second-best weekly rise this year.
But the morning's optimism began to fade after a report in the Financial Times suggested that Standard and Poor's will put Germany, France, the Netherlands, Austria, Finland and Luxembourg -- all AAA-rated members of the euro-zone -- on "creditwatch negative, meaning that the countries have a 50% chance of being downgraded within 90 days.
The pressure grew as other news outlets, citing European Union sources, also started reporting that all 17 members of the euro-zone will be put on watch.
Stocks started the what could be a pivotal week for Europe's debt crisis on a more positive note, as the prospects of an end to the debt saga grew after the leaders of France and Germany agreed on a new fiscal pact that they say will prevent another debt crisis.
As the European debt crisis continues to cloud global markets, the region's leaders are meeting throughout the week, which culminates with a two-day European Council summit to talk about rewriting European Union treaties.
French President Nicolas Sarkozy and German Chancellor Angela Merkel met Monday morning in Paris and agreed on a new pact they say will enforce fiscal discipline in the euro-zone and prevent another debt crisis in the future.
Sarkozy and Merkel said they would like all 27 members of the European Union to adopt the pact, which would require amending or rewriting existing E.U. treaties.
Sarkozy outlined the basic elements of the pact, which he said will be presented in detail at the EC meeting later this week.
Investors are optimistic that if European leaders stay on the track toward a fiscal union, European Central Bank president Mario Draghi will follow through with the "other elements" he hinted at last week
Economically speaking, factory orders for the month of October slipped 0.4%, as expected by economists surveyed by Briefing.com.
November's Institute for Supply Management (ISM) Non-Manufacturing Index indicated that the service sector continued to expand in November although the pace of growth unexpectedly eased with the index falling to 52.0 from 52.9 in October (a reading above 50 indicates that the sector is generally expanding; higher readings indicate a faster pace of growth).
Market expectations going into the report had been for an increase to 53.8.
The price on the benchmark 10-year U.S. Treasury faded, pushing the yield up to 2.05% from 2.04% late Friday. Treasury prices and yields move in opposite directions.
Oil for January delivery increased 77 cents to $101.73 U.S. a barrel.
Gold futures for February delivery fell $15.80 to settle at $1,735.50 U.S. an ounce.
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