The Toronto stock market was sharply lower Monday as commodity prices gave back big gains and early enthusiasm over a plan to deal with the European debt crisis faded.
The S&P/TSX composite index lost 267.45 points on the day, or 2.1%, at 12,404.58
The Canadian dollar settled back 0.53 cents to 100.39 U.S.
There was also major acquisition activity in the resource sector. Grande Cache Coal Corp. has received a $1-billion cash takeover offer from a partnership formed by Chinese and Japanese companies. The offer from Winsway Coking Coal Holdings Ltd. and Japanese trading house Marubeni Corp. is valued at $10 per common share. Grande Cache shares soared $4.00 or 68.1% to $9.87.
The energy sector declined as Suncor Energy moved $1.32 lower to $31.75 and Canadian Natural Resources shed $1.42 to $35.16.
Metal prices also declined while the December copper contract lost 11 cents to $3.60 U.S. after improving demand prospects sent prices surging 15% last week. The base metals sector fell as Teck Resources dropped $1.54 to $39.96 and HudBay Minerals fell back 53 cents to $10.92.
Declining bullion prices also pushed the gold sector down. Barrick Gold Corp. faded $1.29 cents to $49.21 and Goldcorp Inc. moved down $1.18 to $48.50.
The rising U.S. dollar also pressured commodity prices. A stronger greenback usually helps depress commodity prices, which are denominated in dollars, as it makes oil and metals more expensive for holders of other currencies.
The TSX found support from the telecom sector. Rogers Communications gained nine cents to $36.35.
Canadian Pacific Railway was also in focus at the open after U.S. hedge fund manager Pershing Square Capital Management disclosed after the markets closed Friday that his firm has bought 12.5% of the railroad. The move makes Pershing Square CP’s largest shareholder. CP shares were down $2.19 to $61.61.
In other corporate developments, AbitibiBowater Inc. posted a third-quarter net loss of $44 million, or 46 cents per share. That compared to a loss of $829 million, or $14.35 per share a year earlier. Sales came in at $1.22 billion from $1.19 billion and its shares were up 28 cents at $17.03.
TMX Group’s board of directors has decided to support a $3.8-billion takeover bid that will see the owner of Canada’s stock markets acquired by a group of banks, insurance companies and pension funds. TMX chairman Wayne Fox said in a statement late Sunday that Maple Group offer "is in the best interests" of the company and its shareholders.
TMX shares gained $1.44 to $43.80.
Economically speaking, the last day of October proved an active one for Statistics Canada, who revealed that August gross domestic product inched forward 0.3%, powered mostly by gains in the energy field.
What’s more, StatCan’s industrial product price index hiked 0.4% in September, on the backs of higher car and truck prices, while the raw materials price index climbed 1.4% in September, as fuel prices accelerated.
ON BAYSTREET
The TSX Venture Exchange faded 14.99 points to 1,614.90, while the Nasdaq Canada index doffed 13.23 points to 437.01
All but three of the 14 Toronto subgroups were off Monday. Global base metals trailed Friday’s close by 4.6%, materials and energy stocks faltered 2.6%
Telecoms led the three gainers, up 0.9%, while real-estate soldiered on 0.3%, and utilities inched ahead 0.04%.
ON WALLSTREET
In New York, stocks nearly 2% Monday, as the dollar rallied following Japan's intervention in global currency markets and as investors continued to scrutinize the euro-zone debt deal.
The selloff comes on the final day of what has been the best month for the stock market in years.
The Dow Jones Industrials plummeted 276.10 points, or 2.3% to finish the day at 11,955.
The S&P 500 slid 31.79 points to 1,253.30, while the Nasdaq Composite Index shed 52.74 points to 2,684.41.
The losses were broad, with nearly all 30 Dow components in the red. Financial stocks were among the big decliners in early trading, with shares of JPMorgan Chase, Goldman Sachs, Bank of America, Morgan Stanley and Citigroup all down between 4% and 8%.
The Japanese government stepped in early Monday to push down the yen's value in international currency markets. It marked the third time this year Japan's leaders have curbed the yen's rise.
A stronger yen makes it more difficult for exporters to remain competitive.
The move immediately sent the dollar rising against major global currencies, and pressured commodities that are priced in dollars, such as oil and gold. The dollar jumped 3% against the yen.
Despite Monday's declines, markets are poised to close out a stellar month. The Dow is up 11% in October, while the S&P 500 and Nasdaq have surged more than 12%. The gains put the Dow and S&P 500 on course for the best monthly performance since January 1987, and since October 2002 for the Nasdaq.
Investors also continued to digest a plan of action aimed at tackling Europe's debt crisis.
After surging Thursday on news that European leaders had reached an agreement, U.S. stocks ended little changed Friday, as questions and doubts about the deal emerged.
Those remaining questions will likely trigger increased volatility, said one expert.
MF Global became the first high-profile victim of Europe's crisis. Shares of MF Global were halted as the firm filed for Chapter 11 bankruptcy protection.
MF Global is just one of several Wall Street companies that could end up in trouble as banks are forced to take significant writeoffs on the value of their European bonds.
Shares of Humana surged after the managed-care firm beat third-quarter earnings expectations and boosted its full-year earnings outlook.
Allstate insurance and Winn-Dixie Stores were to release their quarterly results after the closing bell.
On the economic front, little is on the agenda for Monday, but the rest of the week promises a busy schedule, including a G20 meeting in France, the latest monetary policy decisions from the Federal Reserve and European Central Bank, and monthly jobs data out of the United States.
Manufacturing in the Chicago region expanded in October, but at a slower pace than economists had forecast. The Chicago Purchasing Managers' Index decreased to 58.4 points this month, from a 60.4 reading in September.
Economists were expecting the figure to come in at 58.9. Any reading above 50 indicates that the sector is expanding.
Other regional surveys have recently shown solid improvement in manufacturing activity in October.
The price on the benchmark 10-year U.S. Treasury ballooned, lowering the yield to 2.18% from 2.31% late Friday. Treasury prices and yields move in opposite directions.
Oil for October delivery fell 45 cents to $92.87 U.S. a barrel
Gold futures for December delivery tumbled $22 to settle at $1,725.20 U.S. an ounce.
