The Toronto stock market fell off the pace Tuesday amid pessimism surrounding the euro-zone debt crisis
The S&P TSX Composite surrendered 38.08 points to end the day at 12,081.25, after spending precious few minutes in the green
On Monday, S&P warned of a possible downgrade of the credit rating of 15 euro-zone countries, including continental economic powerhouse Germany.
There was also major acquisition activity in the Canadian resource sector. Quadra FNX Mining Ltd. said it is being bought by Poland-based copper and silver producer KGHM Polska Miedz for $3.5 billion in cash. Shareholders of Vancouver-based Quadra FNX will receive $15 in cash for each common share of the company. Its shares surged $4.53 to $15.88.
News of the Quadra FNX deal pushed the base metals sector higher, partly on hopes for other acquisitions at fat stock premiums. HudBay Minerals gained 17 cents to $10.36 and Major Drilling Group ran ahead 70 cents to $15.00
Copper prices were lower with the March contract on the Nymex down five cents to $3.56 U.S. News that China was easing lending in order to encourage growth pushed copper prices up almost 10% last week. China is the world’s biggest consumer of the metal.
The TSX financial sector declined, following an earnings disappointment from Bank of Montreal. BMO reported that its quarterly profit rose 21% to $897 million with results helped along by the acquisition of Wisconsin-based Marshall & Ilsley.
On an adjusted basis, profit was $1.27 a share, four cents less than analysts had expected, according to Thomson Reuters and its shares fell $2.10 to $57.74.
Elsewhere in the sector, Scotiabank lost 41 cents to $47.89.
Gold stocks also declined as Goldcorp Inc. lost 70 cents to $52.54.
The TSX energy sector lost ground with Suncor Energy fell 29 cents to $30.87 and Imperial Oil down $1.00 to $43.20.
In other corporate news, Precision Drilling Corp. announced it will take a charge of up to $120 million in the fourth quarter on the decommissioning of 36 drilling rigs and 13 service rigs.
Its shares fell 52 cents to $11.22.
The Canadian dollar regained 0.49 cents to 98.83 U.S. cents, as the Bank of Canada did as expected, keeping its overnight interest rate at 1% this morning, predicting that Europe's recession would be "more pronounced" than previously thought but giving no suggestion of an impending rate cut.
Economically speaking, figures released this morning by Statistics Canada revealed the value of Canadian building permits unexpectedly soared by 11.9% in October from September, as strength in Ontario helped end a three-month losing streak.
ON BAYSTREET
The TSX Venture Exchange faded 10.66 points to 1,542.69, while the Nasdaq Canada index sliced off 1.59 points to 394.34
Nine of the 14 Toronto subgroups ended the session in the red. Industrials lost 1.4%, and financials lost 1.2%, while energy slid 0.7%.
The five gainers were metals and mining, prospering 4.1%, while materials picked up 1.5%, and gold spiked 0.9%.
ON WALLSTREET
In New York, stocks rose Tuesday after an unconfirmed report said European leaders are working on a plan to combine various rescue funds into a so-called big "bazooka"
The Dow Jones Industrials closed up 52.30 points to 12,150.10
The S&P 500 tacked on 1.39 points, to 1,258.47, while the Nasdaq Composite subtracted 6.20 points to 2,649.56
The gains came after Financial Times said European officials are working on a last-minute proposal to combine the resources of an existing bailout fund with one that is planned for next year. The newspaper also said the funds could be supported in some way by the International Monetary Fund.
The report boosted hopes that European Union leaders will produce a meaningful solution to the long-running debt crisis in the euro-zone at a summit later this week.
The leaders of France and Germany agreed Monday on a new pact that they say will help enforce fiscal discipline and prevent a future debt crisis.
Meanwhile, the European Central Bank is widely expected to cut interest rates at its policy meeting Thursday.
While expectations are high for this week's summit, many investors say they are reserving judgment, since past summits have yielded disappointing results.
Shares of Darden Restaurants plunged 11% after the company, which operates Red Lobster, Olive Garden and Longhorn Steakhouse chains, issued a dour outlook for the quarter and fiscal year.
Shares of Taiwanese phone maker HTC were sharply lower 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 have violated two Apple.
Halliburton sank 5% after BP filed a lawsuit Monday alleging that Halliburton "intentionally destroyed evidence" related to the explosion aboard an oil rig in the Gulf of Mexico that led to the worst oil spill in U.S. history.
Metro PCS shares jumped 7% after the company's chief executive reportedly said there has been a "very significant" reduction in the number of customers leaving the pay-as-you-go wireless carrier.
The price on the benchmark 10-year U.S. Treasury faded, nudging the yield up to 2.09% from 2.05% late Monday. Treasury prices and yields move in opposite directions.
Oil for January delivery gave back 74 cents to $101.25 U.S. a barrel.
Gold futures for February delivery fell $20.20 to $1,714.30 U.S. an ounce.
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