Canadian stocks fell Monday as optimism faded about the prospects of last week’s European Union efforts to stem the region’s debt crisis.
The S&P/TSX Composite Index approached noon down 219.40 points, or 1.8%, to 11,815.35
The Canadian dollar dipped 0.89 cents to 97.23 cents U.S.
Moody’s Investors Service said that it still intends to revisit the ratings of all E.U. countries during the first quarter of 2012 given "the continued absence of decisive policy measures."
The ratings company said that the agreements forged in last week’s E.U. summit offer few new measures and pointed out that many of them are similar to previously announced resolutions.
Among mining companies, shares of Lundin Mining Corp. dropped 6.8% and Iamgold Corp. fell 6%.
Energy stocks were also lower, with shares of Talisman Energy shedding 2.7% and Suncor Energy declined by 2.8%.
Suncor said it’s suspending its operations in Syria following the imposition of sanctions against President Bashar Assad’s regime.
Shares of Sun Life Financial Inc. were among the few gainers in Toronto. They rose 3.1% after the company said it will discontinue U.S. sales of variable annuity and individual life insurance products at year end due to “unfavorable product economics.” Sun Life’s chief executive said 800 job cuts are planned.
ON BAYSTREET
The TSX Venture Exchange slid 35.43 points to 1,511.88, while the Nasdaq Canada index stumbled 8.50 points to 380.31
All but one of the 14 Toronto subgroups hurtled earthward by midday. Metals and mining dropped 3.7%, while global base metals tumbled 3.6%, and gold tanked 3.3%.
Only the telecoms group, with a 0.5% gain, held out against the negative tide.
ON WALLSTREET
In New York, stocks tumbled in a broad selloff Monday amid growing investor doubt that Europe's debt crisis will actually be resolved, and a sales warning from chipmaker Intel
The Dow Jones Industrials plummeted 237.08 points, or 2%, to break for lunch at 11,947.20.
The S&P 500 went south 25.79 points, to 1,229.40, while the Nasdaq Composite fell 52.35 points to 2,594.50.
The mood on Wall Street was also sour after Intel warned that it will badly miss its sales forecast for the current quarter because of the worldwide hard drive shortage caused by massive floods in Thailand. Shares of Intel dropped nearly 5%, making the chipmaker's stock one of the biggest losers among Dow issues.
Financial stocks were again in focus as the biggest reactors to European debt concerns. Shares of Citigroup, Bank of America, Goldman Sachs and JPMorgan Chase were all down between 3% and 6% in morning trading.
Netflix's stock spiked more than 7% on chatter that the company could be acquired by Verizon. Netflix's spokesman said the company doesn't comment on rumors or speculation.
Monday's sharp retreat followed Friday's rally, fueled by a deal for a new inter-governmental treaty reached by European leaders to create fiscal unity and resolve the long-running debt crisis. The plan is expected to be finalized by March, but a lot can happen between now and then.
Leaders of the European countries involved in the deal will have to go back and convince their politicians to pass measures that will include "all the ugly stuff that comes along with belt tightening," according to one expert.
Moody's "renewed call to review European sovereign debt" added pressure on the markets. Early Monday, the credit ratings agency said Friday's plan offered "few new measures" and pledged to review the credit ratings of all European Union members at the beginning of the New Year.
"Moody's believes that the system remains prone to further shocks, which would likely lead to selective rating changes," wrote Moody's analysts.
The price on the benchmark 10-year U.S. Treasury gained back lost strength, pushing the yield down to 1.99%, from 2.05% late Friday. Treasury prices and yields move in opposite directions.
Oil for January delivery demurred $1.19 to $98.22 U.S. a barrel.
Gold futures for February delivery fell $49.80 to $1,667 U.S. an ounce.
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