The Toronto stock market racked up a sharp decline Monday afternoon, pushing its main index into correction territory as commodity prices continued to fall on concerns that the global economic recovery has largely stalled.
The S&P/TSX Composite Index dumped another 144.28 points, or 1.1%, to end Monday’s trading at 12,939.70, amounting to a downturn of more than 10% from the 2011 intraday highs reached Mar. 7
The Canadian dollar regained 0.20 cents to 102.41 cents U.S.
Canadian Natural Resources declined 73 cents to $38.61 while Suncor Energy slipped 48 cents to $37.59.
The base metals sector gave up early gains to move down as metal prices fell for a fourth day, with the July contract on the Nymex down three cents to $4.02 U.S. a pound. HudBay Minerals lost 19 cents to $13.36 and Taseko Mines was off 14 cents to $4.38.
Gold stocks fell as Centerra Gold faded 47 cents to $14.88 and Goldcorp Inc. lost $1.15 to $45.05
The financial sector also depressed the TSX as Scotiabank lost 68 cents to $56.90 while Royal Bank shed 21 cents to $54.13.
The TSX fell 3.2% last week on top of a 2% slide the previous week. Investor confidence in the U.S. economy has sharply deteriorated over the last month amid a variety miserable economic data, including slowing expansion in manufacturing and a jobs report for May that widely missed expectations.
Traders also took in the formal launch of a takeover bid for the TMX Group Inc. by Maple Group Acquisition Corp.
The official submission from a newly-expanded Maple Group offers to buy 70% of TMX for $48 per share, valuing TMX at about $3.7 billion. The Maple group hopes that will be enough to make a case for its offer instead of a transatlantic merger planned by the owners of the Toronto and London stock exchanges.
The bid comes a day after Maple Group added four additional financial companies to the mix. The new investors are Desjardins Financial Group, Dundee Capital Markets, GMP Capital Inc. and Manulife Financial. TMX shares were up 39 cents to $44.19.
In other corporate news, talk continued between Air Canada and its customer service and sales staff to head off a strike threat, but there’s no sign of a settlement. But both sides hope they can hammer out a deal before a union imposed strike deadline of 12:01 a.m. Tuesday. Air Canada shares slipped 15 cents to $1.79.
Shares in convenience store operator Alimentation Couche-Tard Inc. gained 33 cents to $26.91 after it said it will acquire up to 322 additional U.S. retail sites from ExxonMobil for an undisclosed price. The locations will become part of the Montreal-area company’s Circle K retail network and will continue to sell Mobil-branded fuel.
ON BAYSTREET
The TSX Venture Exchange shed 18.64 points to 1,916.29 while the Nasdaq Canada index let go of 6.92 points to 584.29
In Toronto, all 14 subgroups were lower on the day. Energy issues folded 1.9%, materials and gold each gave back 1.8%.
ON WALLSTREET
In New York, stocks closed little changed Monday, as investors worked through a downgrade of Greece's credit rating, tempering earlier investor enthusiasm for a series of corporate deals.
The Dow Jones Industrial Average held onto 1.06 points to 11,953
The much-broader S&P 500 nosed up 0.85 points to 1,271.83, while the tech-heavy Nasdaq Composite Index sidled back 4.04 points to 2,639.69
Stocks opened higher following a series of deals. But the gains were short lived after credit agency Standard & Poor's downgraded its rating on Greece to "CCC." S&P also kept its negative outlook on Greece.
The downgrade pressured the currency and commodity markets.
Energy and material stocks were hit hard, with Cabot Oil tumbling 3.5% and Halliburton shares down more than 2%.
Stocks have taken a drubbing as of late, with concerns about the economy slowing down leaving investors battered and bruised.
With no economic data on tap for Monday's session, U.S. investors focused on a series of corporate deals announced before the opening bell.
Apparel company VF Corp. the maker of Wrangler and The North Face brands, agreed to buy Timberland for $43 U.S. per share -- creating a $10-billion U.S. apparel and footwear company.
Shares of Timberland rose 44% and VF Corp.'s stock jumped 10%.
Wendy's/Arby's Group rose 1%, after the restaurant operator agreed to sell Arby's to a private equity group led by Roark Capital Group. Wendy's will retain an 18.5% ownership interest in the roast beef chain's business.
These deals were some of the first M&A activity Wall Street had seen in weeks.
Sears Holdings was the second-best performing stock in the S&P 500, rising more than 5%.
Honeywell announced plans to acquire EMS Technologies for $491 million U.S. in cash. Honeywell shares edged higher, while EMS shares jumped 32%.
European Insurance company Allied World Assurance agreed to buy U.S. insurance company
Transatlantic Holdings for approximately $3.2 billion U.S. in an all-stock deal. Transatlantic shares rose 10%, while Allied World shares were down 4.5%.
Shares of Citigroup rose 3% despite a Wall Street Journal report that said the bank waited three weeks before notifying customers of a credit card hack attack.
The price on the benchmark 10-year U.S. Treasury slumped, with yields inching up to 2.99%, from Friday levels of 2.97%. Treasury prices and yields move in opposite directions.
Oil prices gave back $1.64 to trade at $96.98 U.S. a barrel.
Gold prices dropped 1% to $1,515.60 U.S. an ounce.
