Weak Chinese data and uncertainty about the impact of big U.S. spending cuts weighed on the Toronto stock market Monday.
The S&P/TSX composite index dropped 43.03 points to greet noon at 12,730.09
The Canadian dollar slipped 0.23 cents at 97.11 cents U.S.
Aurizon Mines Ltd. has received a friendly $796-million takeover offer from U.S.-based silver, gold and metals producer Hecla Mining Co. Hecla’s offer values the Vancouver-based miner at $4.75 per share, 40 cents per share above Aurizon’s closing stock price on Friday. Aurizon shares gained 17 cents to $4.52.
Expansion in China’s services sector slowed last month to its lowest level since September. The non-manufacturing Purchasing Managers’ Index fell to 54.5 in February from 56.2 in January.
The base metals sector declined as May copper gave up early gains in the wake of the Chinese data and was unchanged at $3.50 U.S. China is the world’s biggest consumer of copper. Teck Resources declined 38 cents to $30.49.
The gold sector fell as Barrick Gold Corp. was down 35 cents to $29.85.
The energy sector was also down as Canadian Natural Resources dropped 89 cents to $31.16.
The financial sector slipped with Scotiabank down 44 cents to $60.69.
Bank of Montreal was off 19 cents to $63.89 after it lowered its posted rate for a five-year fixed mortgage to 2.99% from the current 3.09%.
The move prior to the major spring buying season comes after Canada Mortgage and Housing Corp. warned of a slowdown in the housing sector, saying new housing construction is expected to be lower this year due to moderate economic and employment growth.
There are plenty of major economic data coming down this week.
On Friday, Statistics Canada releases the February jobs report.
Economists anticipate job creation for February to come in at 8,000 after a plunge of 22,000 positions during January, with the jobless rate edging up 0.1 of a point to 7.1%.
ON BAYSTREET
The TSX Venture Exchange faded 16.32 points to 1,103.77
Nine of the 14 Toronto subgroups were down at noon, with gold losing 1.9% of its shine, materials and the metals and mining group each forfeiting 1.8% of their strength.
The five gainers were led by industrials, up 0.6%, telecoms, up 0.5%, and consumer discretionaries, moving up 0.3%.
ON WALLSTREET
U.S. stocks were modestly lower Monday morning – albeit off their lows for the day -- following a sharp selloff in Chinese stocks on concerns about a property bubble in the world's second biggest economy.
The Dow ditched 31.51 points to break for lunch at 14,058.20.
The S&P 500 index dropped 0.51 points to 1,517.69. The tech-heavy NASDAQ Composite slumped 7.33 points to 3,165.22.
In the United States, shares of companies that are exposed to China were among the worst performers. Caterpillar, Alcoa, Boeing and United Technologies were all down.
There was little in the way of corporate news Monday. But shares of Apple continued to slide, hitting another 52-week low. The stock is now down 20% so far this year
It appears investors have become increasingly convinced that federal spending cuts would go into effect after budget talks in Washington broke down last week.
While the cuts could be a drag on economic growth, investors believe they are at least a step towards dealing with the nation's fiscal crisis
Some analysts fear that the $85 billion U.S. in cuts, which will not be felt immediately, could take a big bite out of economic growth this year. But many investors are hopeful that lawmakers will eventually replace the arbitrary, across-the-board cuts with something more targeted.
Chinese stocks tumbled Monday, as the government in Beijing announced new measures to avert a real estate bubble.
Prices on the 10-year U.S. Treasury hesitated a bit, raising yields to 1.87% from Friday’s 1.85%. Treasury prices and yields move in opposite directions.
Oil prices slipped 86 cents to $89.82 U.S. a barrel.
Gold prices poked up 40 cents to $1,572.70 U.S. an ounce.
