TORONTO - The Toronto stock market moved lower in mid-morning trading Monday as investor pessimism about the state of the global economy continued to pressure stocks ahead of the Bank of Canada's key interest rate announcement.
The S&P/TSX composite index lost 104.50 points to 11,465.15 as gold stocks took a beating.
This followed a rout of all major North American indexes Friday, when an abysmal consumer confidence report south of the border and some disappointing earnings from key U.S. companies heightened investors' concerns that the global economic recovery is stalling.
Weaker growth expectations in China and the United States, combined with the continued sluggish recovery in debt-plagued Europe, have dampened the prices of everything from oil and metals to coal and wood products — commodities used to fuel growth in the global economy.
On Monday, gold stocks lost two per cent as the August bullion contract fell $6.70 to US$1,181.50 an ounce. Shares in Goldcorp Inc. (TSX:G) lost 98 cents or 2.3 per cent to C$41.46.
The Toronto energy sector fell 0.4 per cent even as the August crude contract on the New York Mercantile Exchange gained 96 cents to US$76.97 a barrel. Shares in Suncor Energy Inc. (TSX:SU) lost 37 cents to C$33.22.
Financials fell 0.9 per cent following disappointing earnings reports from Citigroup (NYSE:C) and Bank of America (NYSE:BAC) on Friday. More insight into the banking sector will come this week when Wall Street giants Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) report. As two of the largest U.S. investment banks, they could be facing the biggest effects of the recently passed financial reform regulation.
Shares in Bank of Montreal (TSX:BMO) lost 48 cents to $60.97.
Base metals stocks fell 0.9 per cent as the September copper contract on the Nymex gained 1.55 cents to US$2.95 a pound. This followed a big decline that routed base metals stocks on Friday. Shares in Teck Resources Ltd. (TSX:TCK.B) lost 50 cents to C$33.94.
The loonie also edged higher, gaining 0.17 cent to 94.99 cents US.
The TSX Venture Exchange lost 10.36 points to 1,369.13.
With no major economic data set to be released Monday, U.S. investors looked to earnings reports from some key companies.
Halliburton (NYSE:HAL), toy-maker Hasbro (NYSE:HAS) and Delta Air Lines (NYSE:DAL) all beat analysts' expectations based on earnings per shares. However, signs of future growth weren't as promising. The U.S. ban on deepwater exploration is expected to cut into Halliburton's future profits, and Hasbro's sales continued to slow.
The Dow Jones industrial average fell 7.72 points to 10,090.18. The Nasdaq composite index added 1.02 points at 2,180.07 while the S&P 500 index slipped 1.36 points to 1,063.52.
All the major indexes tumbled Friday, with the Nasdaq ending the session down more than three per cent following an abysmal consumer confidence report and some weak earnings from key companies.
In Canada, investors are awaiting the Bank of Canada's interest rate decision on Tuesday. The central bank is expected to raise its key lending rate by a quarter percentage point to 0.75 per cent, another indication that Canada's economic recovery has so far been stronger and faster than in the United States.
Meanwhile, housing data out of the U.S. this week could continue to pressure markets. Housing starts, due Tuesday, are projected to drop five per cent for June, while existing home sales, which will be reported Thursday, are expected to fall 10 per cent for the same month.
In Canadian corporate news Monday, private equity firm Onex Corp. (TSX:OCX) and the Canada Pension Plan Investment Board bid 2.87 billion pounds (US$4.37 billion) for British engineering and manufacturing company Tomkins PLC. Shares in Onex added two cents to $25.09.
Qatar Airways has ordered three business jets from Canadian manufacturer Bombardier Inc. (TSX:BBD.B) in a deal worth US$122 million at list prices. Qatar Airways said it is still talking to Bombardier about buying its CSeries commercial jet, but was not able to conclude its deal at the Farnborough air show. Bombardier shares lost 21 cents or 4.4 per cent to $4.53.
And Ivanhoe Mines Ltd. (TSX:IVN) said it has added three more lenders, including Export Development Canada, to a group arranging a debt financing package for a huge copper and gold project in Mongolia. Shares in Ivanhoe added 18 cents to $17.30.
European markets were mixed after Moody's Investors Service cut its rating on Ireland's debt. Britain's FTSE 100 rose 0.3 per cent, Germany's DAX index gained 0.1 per cent and France's CAC-40 fell 0.5 per cent.
Japan's Nikkei stock average fell 2.9 per cent, while Hong Kong's Hang Seng index lost 0.8 per cent.
