The Toronto stock market was off to a tepid start to September trading Tuesday while investors wondered what steps central banks might take to support the economic recovery.
The S&P/TSX Composite index stepped back 7.56 points to close at 11,941.70
The Canadian dollar gained 0.25 cents to 101.46 cents U.S.
Montreal-based Valeant Pharmaceuticals International Inc. is buying U.S. dermatology products maker Medicis Pharmaceutical Corp. for about $2.6 billion in cash in a deal to strengthen its position in skin treatments and care.
Valeant said Monday that it is paying $44 per share for Medicis, a 39% premium over Friday’s closing price of $31.87 for the Scottsdale, Ariz., company. Valeant stock ran up $7.51 or 14.9% to $57.98.
And Toronto-based conglomerate Onex Corp. dipped 52 cents to $38.24 as it announced that it is buying Louisville, Ky.-based SGS International Inc. for $813 million. The company is a provider of packaging graphics services.
Telecoms was also among TSX advancers with BCE Inc. ahead 22 cents to $44.04.
Commodity prices were mixed. The gold sector was down as Barrick Gold Corp. lost 31 cents to $37.70.
The December copper contract on the Nymex was up two cents at $3.48 U.S. a pound but the base metals sector lost 0.5%. Teck Resources fell 67 cents to $26.57.
The energy sector dipped as Canadian Natural Resources lost 75 cents to $29.24.
Canada's central bank will be in focus Wednesday as the Bank of Canada makes its next announcement on interest rates. The bank is expected to leave its key interest rate unchanged at 1%, but traders will look for hints as to when the bank might hike rates.
Canadian employment data is also being released Friday. It is believed that the economy cranked out 11,000 jobs last month.
The market may also have one eye cocked on today’s election in Quebec, in which polls suggest victory by Pauline Marios’ pro-sovereignty Parti Quebecois, which has been in opposition to Premier Jean Charest’s Liberals for the past nine years.
ON BAYSTREET
The TSX Venture Exchange acquired 1.84 points to 1,242.58. The Nasdaq Canada was unchanged at 345.68
Of the 14 Toronto subgroups, 10 were negative on the day. Global base metals sank 1.1%, while energy slid 0.6% and gold eased 0.5%.
The four gainers were led by health-care issues, ballooning 3.2%, while telecoms and information technology advanced 0.3%.
ON WALLSTREET
U.S. stocks slipped Tuesday as investors digested two economic reports showing sluggishness in the U.S. economy.
The Dow Jones industrial average dipped 54.90 points to close the day at 13,035.90.
The S&P 500 index fell 1.64 points to 1,404.94, but the tech-heavy Nasdaq Composite Index was higher by 8.09 points to 3,075.06.
If history is any guide, investors could finally see an end to the 2012 stock rally. September has been the worst performing month for the S&P 500 over the past 30 years.
Still, according to research from Schaeffer's, there's a chance for an Obama-fueled bounce. When a Democrat has been in office during an election year, the S&P 500 is up 1.3% on average.
Investors shrugged off better-than-expected monthly sales from the big three automakers: General Motors, Ford, and Chrysler.
Shares of Netflix tumbled nearly 10% after Amazon.com announced a licensing deal with the cable channel Epix to provide streaming movies.
Facebook's stock fell 2% to below $18 U.S. a share, another new low for the social network.
Campbell Soup posted better-than-expected earnings Tuesday morning, sending shares of the company higher.
Smithfield Foods reported earnings of 40 cents U.S. per share, coming in bellow analyst expectations. The company cited growth in its packaged meat business, but poor performance of its fresh pork business dragged on profits.
In his speech last week, Federal Reserve Chairman Ben Bernanke indicated that additional stimulus could be on the way, saying that the central bank is still willing to do whatever it takes to support the economy.
Meanwhile, Europe will once again be in focus after Moody's warned that the European Union's Aaa credit rating was at risk. Moody's revised its outlook on the EU to "negative" from "stable."
As euro-zone leaders return from summer holidays, investors are bracing for several key events in the euro area this month, starting with a crucial meeting of the European Central Bank on Thursday.
European Central Bank President Mario Draghi is widely expected to unveil details of a new bond-buying program for euro-zone governments that agree to certain conditions. But it remains to be seen if Draghi, who many view as the euro's saviour, will meet investors' high expectations.
Economically speaking, the Institute for Supply Management reported Tuesday that its monthly index slipped to 49.6.
Economists had been expecting the index to come in flat with a reading of 50, according to Briefing.com consensus.
That's compared to an ISM index reading of 49.8 in July. The July number ended a 34-month-long growth streak.
Any reading below 50 represents contraction, while any reading above it shows growth.
Construction spending dropped 0.9% to an annual rate of $834.4 billion U.S., the lowest level since April, the U.S. Commerce Department said on Tuesday. The decline was the first since March and followed an unrevised 0.4% rise in June.
The price on the benchmark 10-year U.S. Treasury rose, pushing the yield sharply lower to 1.58% from 1.62% late Friday. Treasury prices and yields move in opposite directions.
Oil prices for September delivery fell $1.00 to $95.47 U.S. a barrel.
Gold futures for December delivery added $8.40 to $1,696.00 U.S. an ounce.
