The Toronto stock market was in negative territory Monday afternoon as a dour new assessment of Europe’s economy and lower oil and gold stocks put pressure on the main index.
The S&P/TSX Composite Index had fallen 76.38 points, to close Monday at 11,559.
The Canadian dollar gained 0.14 cents to 96.59 cents U.S.
The TSX reached its lowest level of the session early Monday afternoon after the president of the European Central Bank said his institution is seeking ways to keep the euro-zone’s bailout fund effective even if France and other countries lose their AAA debt ratings.
Mario Draghi was speaking to lawmakers at the European parliament just as European Union finance ministers were trying to figure out how to come up with up to €200 billion ($261 billion U.S) in new loans for the International Monetary Fund.
It’s a light week for economic data heading into the four-day Christmas shutdown on the TSX.
In domestic news, Eldorado Gold Corp. said Sunday it has struck a friendly, $2.5-billion takeover deal for European Goldfields Ltd., a Yukon-based gold miner with projects in Greece, Romania and Turkey. Eldorado shares lost 13.1% or $2.02 to $13.37. European Goldfields shares fell 5% or 59 cents to $11.25.
Meanwhile shares of market heavyweight Research In Motion continued a downward slide that weighed on the TSX in the second day of trading after it released disappointing quarterly results and holiday forecast. Its shares were down 4.7% or 65 cents each at $13.32.
Elsewhere, in the energy sector, shares of Suncor Energy eased 31 cents to $27.49, while rival Imperial Oil dropped 47 cents to $42.39. Shares in Canadian Natural Resources gave back 96 cents, or 2.7%, to $35.14.
In the gold sector, Goldcorp Inc. dwindled $1.22 to $46.12, while Barrick Gold backpedaled 31 cents to $46.34
Investors also weighed the potential consequences of the death of North Korea’s ruler, Kim Jong-Il. The announcement, made Monday by North Korean state television, raised the spectre of more instability on the divided Korean peninsula.
Analysts warn that Kim’s death could cause an uncertain power transition and put the brakes on talks aimed at getting the secretive communist state to give up its nuclear weapons.
On matters economic, Statistics Canada reported this morning that wholesale sales increased 0.9% to $49.2 billion in October, with growth in the west driving much of the hike.
ON BAYSTREET
The TSX Venture Exchange shaved 1.07 points to 1,425.04, while the Nasdaq Canada index was down 2.52 points to 351.70
All but four of the 14 Toronto subgroups were down on the day. Global base metals slid 2.7%, while gold and materials suffered 2.2% each.
The four gainers were led by telecoms, up 1.3%, while consumer staples rose 0.6%, and utilities moved doggedly ahead 0.3%.
ON WALLSTREET
In New York, stocks fell sharply Monday as investors remain concerned about the debt crisis in Europe and its potential impact on the global banking system.
The Dow Jones Industrials tumbled 100.13 points to end the day at 11,766.30
The S&P 500 demurred 14.50 points, to 1,205.16, while the Nasdaq Composite faded 32.19 points to 2,523.14
Trading volumes were light Monday, with many market players taking time off ahead of the holiday. On the New York Stock Exchange, about 2.8 million shares changed hands.
Stocks opened higher but the gains faded as the banking sector dragged down the broader market.
Bank of America fell below $5 U.S. per share, lowest level since the worst of the financial crisis in March 2009. Citigroup, Goldman Sachs and JPMorganChase were also down sharply.
U.S. banks have been hit by concerns about their exposure to bonds issued by fragile governments in the euro-zone. On Friday, Fitch put seven European countries on credit watch negative, citing a higher probability that it could downgrade these nations in the next
Saudi Prince Alwaleed Bin Talal and his investment company, Kingdom Holding Company, announced a combined investment of $300 million U.S. in Twitter, a social media website.
Shares of Winn Dixie rose after the food retailer agreed to merge with Bi-Lo to create an organization of 690 grocery stores throughout the U.S. Bi-Lo will acquire the outstanding Winn Dixie shares.
Shares of Zynga eased one day after the company made its public debut on the Nasdaq Friday. The maker of popular Facebook game FarmVille priced shares at $10 U.S. apiece in its initial public offering late Thursday.
European finance ministers continue to work on a plan to strengthen a financial "firewall" by funneling between €150 and €200 billion euros into the International Monetary Fund. They are also trying to finalize the details of an intergovernmental pact to ensure budgetary discipline.
North Korean leader Kim Jong Il died Saturday after suffering from a heart attack, according to a state media report. The ruling Worker's Party proclaimed his youngest son, Kim Jong Un, "the great successor," indicating he would assume his father's post.
Traders said it was too soon to say how the transition could impact the stock market. "If you can find someone who knows anything about the son, I'd love to talk to them," said one expert.
The price on the benchmark 10-year U.S. Treasury eked upward, pushing the yield down to 1.81% from 1.85% Friday. Treasury prices and yields move in opposite directions.
Oil for January delivery inched up seven cents to $93.60 U.S. a barrel.
Gold futures for February delivery fell $4.90 to $1,593.00 U.S. an ounce.
