| Stocks mainly lower as European debt woes continue to discourage investors |
| Monday, 08 February 2010 14:06 |
|
TORONTO - The Toronto stock market was firmly negative Monday amid ongoing worries about the global economic recovery and sovereign debt issues in Europe. The S&P/TSX composite index gave up an early modest lead to decline 38.4 points by mid-afternoon to 11,184.8. Markets have been pressured by fears about unsustainable government debt in several European countries, particularly Portugal and Greece. Those concerns intensified last week, undermining the euro, after Portugal's lawmakers defeated the government over its deficit reduction plan. Stock markets have been heading lower since mid-January in the wake of China's plans to limit economic growth by curbing lending and also growing uncertainty around the U.S. government's proposed rules to restrict trading by large financial institutions. Debt worries have been brewing since late November when Dubai announced that the government's flagship investment company was in financial trouble and announced a request for a six-month standstill on repayments of its massive debt. "I was sort of surprised at that juncture that the market didn't react more negatively than it did," said Steve Uzielli of ScotiaMcLeod. "But what we didn't know was, (were) there other Dubais out there? And then, lo and behold, you have Greece and Spain and Portugal. It has put pressure on the euro - it's not going to bring down the whole complex but it is a cause for concern." Hopes for a strong rebound had helped drive stock markets higher with hardly a break, beginning in early March of 2009. But the recent troubles demonstrate a recovery might not be happening as fast as some had anticipated. "We never expected the recovery to be moving up in a straight line - the so-called V-shaped recovery - we've been anticipating more of a choppy year in 2010," added Uzielli. "It's become cliched now with a strong first half economically and a weak second half. But even in that first half, you're going to get stops and starts." The Canadian dollar moved down 0.14 of a cent to 93.32 cents US. On the TSX, the gold sector was the biggest percentage decliner, off 2.5 per cent even as the April gold contract on the Nymex gained $12.30 to US$1,065.10 an ounce. Barrick Gold Corp. (TSX:ABX) faded C$1.12 to $37.33 while Goldcorp Inc. (TSX:G) declined 95 cents to $37.24. The industrials sector fell back about one per cent with Canadian National Railways (TSX:CNR) down 71 cents to $52.82. Bombardier Inc. (TSX:BBD.B) lost 13 cents to $5.32 as a German customer ordered 48 additional Talent 2 trains from the transportation giant for euro200 million or about US$272 million. And the company also says it is offering to buy back up to US$550 million of its outstanding debt securities for cash, in order to take advantage of current favourable conditions on capital markets. Oil prices headed higher after three days of declines with the March crude contract on the New York Mercantile Exchange ahead 28 cents to US$71.47. The energy sector was off 0.3 per cent with Suncor Energy (TSX:SU) down 34 cents to C$31.56. The financial sector lost early momentum to move down 0.44 per cent as Manulife Financial (TSX:MFC) headed down 31 cents to $18.93. The base metals sector was up 0.45 per cent as March copper added four cents to US$2.90 a pound. Commodity prices were depressed last week as debt concerns pushed the U.S. dollar higher. Equinox Minerals (TSX:EQN) gained seven cents to C$3.46 and Teck Resources (TSX:TCK.B) gained $1.04 to $35.24 ahead of earnings coming out after the market close. The TSX Venture Exchange moved up 5.13 points to 1,460.54. New York markets were mainly lower as the Dow Jones industrials backed away 22.6 points to 9,989.6. The Nasdaq composite index was up 3.28 points to 2,144.4 while the S&P 500 index dipped 0.4 of a point to 1,065.8. In economic news, Canada Mortgage and Housing Corp. reported that the annual rate of housing starts reached 186,300 in January, up from 176,100 in December. The agency added that actual housing starts for 2009 totalled 149,081 units, with activity improving as the year progressed. In other corporate news, mining company Xstrata PLC on Monday reported a 41 per cent drop in full-year net profit as last year's economic downturn and the weakness of the dollar affected global commodity sales. Profit fell to US$2.77 billion. Xstrata became a major player in Canada's mining industry after it acquired the former Falconbridge nickel miner a few years ago. The Canpotex marketing partnership has agreed to sell 350,000 tonnes of Canadian potash to China's Sinofert. The fertilizer ingredient was sold at "competitive prices" on the spot market and is to be shipped before the end of March. Canpotex is owned by three companies: PotashCorp. (TSX:POT), Agrium Inc. (TSX:AGU) and Mosaic Corp. (NYSE:MOS). Potash shares slipped 50 cents to C$110.50 while Agrium climbed was down 41 cents to $62.69. Shares in technology firm Wi-Lan Inc. (TSX:WIN) rose four cents to $2.71 after it said it has signed a letter of intent to settle a lawsuit filed by Telus Communications Inc. (TSX:T), which claimed ownership interests in several patents. Telus shares dipped six cents to $32.57. |
Search
