Stocks approached noon opened lower, dragged down by sinking energy shares, which was widely anticipated after Canada's rejection of Malaysia's bid for Progress Energy Resources. But the index is peeking into positive territory as the morning progresses, getting help from some uplift in U.S. stocks.
The S&P/TSX composite fell 29.24 points to break for lunch at 12,386.74
The Canadian dollar gained 0.07 cents to 100.60 cents U.S.
Shares in Progress are down 13% at $18.80, not nearly as harsh as the 30% plunge some market watchers were predicting.
Nexen shares are down 6.2% at $23.58 on the TSX. Nexen is particularly vulnerable to a selloff today given that it is subject to a $15.1-billion takeover bid from Chinese oil group CNOOC and may face similar obstacles in getting regulatory approval in completing the deal. Its shares had been off as much as 15% before the opening bell.
Elsewhere, Celtic Exploration is down 1.1% at $25.90. The company last week received a $2.6-billion takeover offer from Exxon Mobil in a deal that also needs approval from Investment Canada. Encana is down 3.2% at $23.01. Its depressed shares had analysts speculating last week it could become the next takeover target, but those thoughts are now diminished given the rejection of the bid for Progress Energy.
ON BAYSTREET
The TSX Venture Exchange fell 7.38 points to 1,308.24
Nine of the 14 Toronto subgroups were down by noon hour ET, weighed mostly by energy stocks, off 1.3%, while telecoms and consumer staples gave back 0.4% each.
The five gainers were paced by materials and gold, up 0.9%, while metals and mining gained 0.8%.
ON WALLSTREET
U.S. stocks floundered Monday as investors took a cautious approach at the start of a big week for Corporate America.
The Dow Jones Industrial average surrendered 26.95 points midday at 13,316.60
The S&P 500 index dropped 2.71 to 1,430.48, while the Nasdaq gained 4.42 to 3,010.04
Global bellwether Caterpillar kicked off the week's earnings deluge with a disappointing outlook, even as its quarterly results came in better than expected, citing continued economic weakness and uncertainty.
After a weak open, Caterpillar held on to slim gains, making it one of nine gainers on the Dow Jones Industrial Average. But General Electric and Microsoft, which reported lackluster earnings last week, continued to drag on the blue chip index.
The much-broader S&P 500 also lost ground, as a 3% decline in shares of VF Corp, the maker of North Face jackets and Wrangler jeans, weighed on the index. The company, which is also behind brands like Seven for all Mankind and Vans, posted revenue that missed expectations.
The Nasdaq was little changed, as gains in Netflix helped buoy the tech-heavy index. The online streaming service opens its books later this week, as do fellow tech heavyweights Facebook, Apple and AT&T
But first Yahoo, with new CEO Marissa Mayer at the helm, will be in the spotlight when it reports after the bell Monday.
Analysts at S&P Capital IQ predict third-quarter earnings for companies in the S&P 500 will grow by just 0.04% overall this quarter, the worst since the third quarter of 2009.
Elsewhere in company news, Ancestry.com shares surged after the genealogy website announced plans to be taken over by an investor group led by private equity firm Permira. The cash transaction values Ancestry.com at $1.6 billion U.S., or $32 per share.
Halcón Resources shares jumped after the company announced a $1.4-billion U.S. deal with Petro-Hunt to develop a stake in North Dakota's gas-rich Bakken and Three Forks region.
The price of the benchmark 10-year U.S. Treasury gained, raising the yield down to 1.79% from Friday’s 1.77%. Treasury prices and yields move in opposite directions.
Oil prices fell 51 cents to $89.54 U.S. a barrel.
Gold prices picked up five dollars to $1,728.90 U.S. an ounce.
