The Toronto stock market was down about 100 points Monday, rattled by bad marks given to the U.S. government’s debt by a rating agency and a drop in the highly influential price of oil.
The S&P/TSX Composite Index was off the worst lows of the day but still down 96.79 points to 13,702.33
The Canadian dollar faded 0.45 to 103.71 cents U.S.
Suncor Energy fell 94 cents to $41.14 while Cenovus Energy lost 77 cents to $35.18.
The base metals sector was down amid major deal making in the sector.
Capstone Mining Corp. is buying Far West Mining Ltd. and has struck a deal to develop the acquired company’s major Chilean copper project in a transaction worth more than $1.1 billion.
The two Vancouver companies announced Sunday that Capstone will acquire Far West for about $725 million in a cash and share deal that values the target company at $9.19 per share. Far West shares gained 53 cents to $8.21 while Capstone was down 18 cents to $4.03.
Elsewhere in the resource sector, investors looked to quarterly earnings from Teck Resources after the market close. The miner is expected to hand in earnings of 89 cents a share, up sharply from 35 cents a year ago. Its shares declined $1.06 to $48.77.
The sector backed off as the May copper contract on the Nymex lost six cents to $4.20 U.S. a pound. First Quantum was down $2.21 to $116.80.
Financials were also lower while CIBC moved down 21 cents to $82.29 while Manulife Financial dropped 27 cents to $16.18.
The gold sector was also lower as Goldcorp Inc. faded 25 cents to $51.80 while Kinross Gold Corp. declined 37 cents to $14.67.
In other earnings news, TD Ameritrade Holding Corp. said its second-quarter net income rose to $171.7 million U.S., as transaction-based revenue grew 16%. The results were expected to contribute $57 million of net income to TD Bank Group which owns 40% of Ameritrade. TD shares fell 81 cents to $81.28.
Elsewhere on the corporate front, Magma Energy Corp. shares gained a penny to $1.05 after the company agreed to sell a 25% stake in Icelandic geothermal power company HS Orka to a group of local pension funds after protests over foreign ownership of the country’s resources. The company will receive $71.5 million in the transaction, which it says is about the amount it paid for the assets last year.
On the economic front, Statistics Canada announced this morning that foreign acquisitions of Canadian securities dropped to $2.5 billion in February. Meanwhile, Canadians bought more offshore securities, that number strengthening to $2.6 billion in February, led by acquisitions of U.S. government securities.
ON BAYSTREET
The TSX Venture Exchange docked 52.31 points to 2,238.60 while the Nasdaq Canada index regained 6.32 points to 754.05
In Toronto, eight of the 14 subgroups were down Monday. Metals and mining faded 2.1%, while global base metals let go of 2%, and energy fell 1.4%.
The half-dozen gainers were led by consumer staples, up 0.8%, telecoms, picking up 0.5%, while real-estate issues improved 0.4%.
ON WALLSTREET
In New York, stocks remained sharply lower Monday afternoon, after Standard and Poor's cut its long-term outlook on U.S. debt to negative.
The Dow Jones industrial average plummeted 140.24 points, or 1.1%, to end Monday at 12,201.60
The S&P 500 moved lower 14.54 points to 1,305.14, while the Nasdaq Composite Index dropped 29.27 points to 2,735.38.
S&P kept its “AAA”-rating on the world's largest economy, but said it was concerned about the United States' ballooning deficit. While President Obama and GOP leaders have unveiled separate plans to reduce the U.S. deficit, the ratings agency said "the gap between the parties remains too wide."
The news sent stocks plunging right from the open, with 94% of the S&P 500 companies in the red, and all but two of the Dow's 30 components trading lower. Caterpillar, Bank of America and Alcoa were the biggest drags on the blue-chip index.
Investors are also on edge as they brace for more than 110 members of the S&P 500 to announce quarterly financial results this week.
Citigroup reported earnings per share of 10 cents Monday morning, which was slightly better than forecast. The bank's credit losses narrowed for the seventh quarter in a row. Citi's stock was up 1.6%.
Chip maker Texas Instruments was to report after the closing bell.
In the economic sphere, the National Association of Home Builders' Housing Market Index fell to 16 in April. Economists were expecting the index to remain unchanged at 17 points
The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.37% from 3.41% late Friday. Treasury prices and yields move in opposite directions.
Oil for February delivery slipped 82 cents to $107.29 U.S. a barrel.
But gold, a safe-haven commodity, got a boost, with prices up $11, or 0.7%, to $1,497 U.S. Earlier, prices climbed to an intraday record of $1,498.60 U.S.
