The Toronto stock market was sharply lower Monday afternoon as commodity stocks gave up early strong gains even as fighting in Libya kept crude oil prices higher while nervous investors sought a safe haven in bullion.
The S&P/TSX composite index plunged 160.42 points into negative territory, or 1.1%, to close at 14,092.35
The Canadian dollar sagged 0.06 cents to 102.81 cents U.S.
The energy sector lost ground amid climbing oil prices as fighting between supporters and opponents of Libyan leader Moammar Gadhafi intensified over the weekend, raising fears that the fighting won’t be over anytime soon.
There has been a great deal of nervousness that fighting in Africa’s biggest oil producing nation could spread to other oil-rich countries in the Mideast, particularly Saudi Arabia. There are also concerns about the effect that higher oil prices could have on transportation, manufacturing and utilities.
Canadian Natural Resources was down $1.43 to $48.27.
The gold sector was down as Barrick Gold Corp. rose 15 cents to $51.55 while Kinross Gold Corp. advanced 19 cents to $15.37.
The base metals sector also lost early momentum, falling as declines in copper prices accelerated with the May contract in New York down 16 cents at $4.33 U.S. a pound.
Quadra FNX Mining declined 51 cents to $13.45 while Thompson Creek Metals Co. Inc. shed 37 cents to $12.38.
The financial sector was down Monday with Manulife Financial down 34 cents to $17.98.
Shares in Scotiabank, which concludes the reporting season with its results Tuesday, rose 52 cents to $60.18 ahead of results being released Tuesday.
In corporate news, Magma Energy Corp. has agreed to acquire Plutonic Power Corp., an all-stock deal worth about $190 million to create a more diversified alternative energy company with a market cap of $575 million. Plutonic shares jumped 12 cents to $2.54 while Magma shares were off 10 cents at $1.12.
Copper Canyon Resources Ltd. has set aside its opposition to a takeover by NovaGold Resources and agreed a revised offer. Under the deal announced Monday, Copper Canyon would be split into two companies, including one that will remain largely independent of NovaGold. Copper Canyon shares jumped 20 cents or 23.8% to $1.04.
Elsewhere, Burcon NutraScience Corp. announced Friday that agribusiness giant Archer Daniels Midland has licensed the rights to the company’s soy product for making protein-fortified beverages such as juices, soft drinks and sports drinks.
The Vancouver-based company will receive royalty payments on ADM’s worldwide sales of Clarisoy under the 20-year deal. Burcon shares dropped 74 cents to $10.58.
Economically speaking, the value of building permits issued by municipalities unexpectedly fell in January. Statistics Canada said Monday that permits fell by 5.1% to $5.4 billion, against a 0.5% rise that economists had expected.
The agency said that lower construction intentions, particularly for the residential sector in Ontario and the non-residential sector in Alberta and British Columbia, were behind the decline.
The major economic report of the week comes out on Friday. Statistics Canada is expected to report the economy cranked out another 22,000 jobs during February.
ON BAYSTREET
The TSX Venture Exchange subtracted 16.05 points to 2,423.78, while the Nasdaq Canada index sifted off 16.51 points to 813.74
In Toronto, it was a clean sweep for the losers among the 14 subgroups. Metals and mining stocks took the worst bruising, down 2.9%, while global base metals suffered 2.3% and health-care stocks tumbled 2.1%.
ON WALLSTREET
In New York, stocks dropped Monday, dragged down by the tech sector, surging oil and gold prices, and Greek debt woes.
The Dow Jones industrial average slumped 79.85 points to 12,090, pulled down by tech stocks including Intel and Cisco which both fell about 2%. Wells Fargo downgraded the semiconductor sector Monday, which hurt Intel and other chip companies.
The S&P 500 was down 11.02 points to 1,310.13. The tech-rich Nasdaq index collapsed 39.04 points to 2,745.63
Investors are also keeping a close eye on commodities, after crude oil rose to more than $106 U.S. a barrel early Monday. Oil finished the day at about $105.44 U.S., an increase of more than a dollar.
Western Digital's stock climbed 14%, after the company agreed to acquire Hitachi's hard disk drive business. The stock and cash transaction is valued at $4.3 billion U.S.
Western Digital's top rival, Seagate Technology, rose 9% on the news.
Starbucks stock rose 1.5%, after Morgan Stanley analysts upgraded the company's price target and CEO Howard Schultz told the Wall Street Journal the coffee company is planning several acquisitions over the next 12 to 18 months to bolster its consumer products division.
Starbucks is kicking off a campaign celebrating its 40th anniversary this week, starting with newspaper articles Monday and rolling out with television ads and in-store promotions Tuesday.
On the economic front, consumer credit increased by $5 billion U.S. in January, according to a report by the Federal Reserve released Monday afternoon. Economists surveyed by Briefing.com had expected consumer credit to have increased by $3.3 billion U.S. in January.
The price on the benchmark 10-year U.S. Treasury lost a bit of ground, pushing the yield up to 3.50% from Friday’s 3.49%. Treasury prices and yields move in opposite directions.
Oil for February delivery gained 53 cents to $104.82 U.S. a barrel.
Gold set a new intraday record in early trading, rising to $1,445 U.S. an ounce, as investors sought safety in the precious metal. It pared back those gains later in the day though, settling at $1,434.50 U.S. an ounce on the Chicago Mercantile Exchange.
