Markets opened lower Monday on weaker oil and gold prices as the U.S. dollar gained strength.
The Toronto Stock Exchange’s benchmark, the S&P/TSX composite index, was down about 100 points at 10,470 at 10.30 a.m. ET.
The Canadian dollar was down to 89.32 cents US -- its lowest level in two weeks -- from its previous close of 89.37 cents US.
The price of oil was down to US$68.19 a barrel after finishing Friday at US$68.44 a barrel. Crude has jumped more than 50% in 2009 -- 38% in the just the past two weeks -- leading many to speculate it is due for a correction.
Gold was down to US$948.70 an ounce after closing at US$962.60.
The TSX was down more than 110 points inside the first hour of trading but has started to pare these losses as market watchers factor in domestic data, such as housing starts, and promising comments on the Canadian economy from overseas.
Housing starts rose more than expected in May, with increased construction seen in both single and multiple dwelling sectors, according to Canada Mortgage and Housing Corporation. The seasonally adjusted annual rate of starts increased to 128,400 units during the month from 117,600 in April, CMHC said Monday. Economics expected housing starts to total 126,000 units in May.
"The Canadian housing market appears to have bottomed with existing home sales and price deflation improving over the past few months," said Benjamin Reitzes at BMO Capital Markets ahead of Monday’s data.
According to the results of a survey by the Organization for Economic Co-operation and Development on Monday, there are stronger indications that the downturn may have hit bottom in Canada, France, Italy and Britain. The organization also said the economic outlook for the OECD area declined at a slower pace in April its composite leading indicator for the area rose.
In the U.S., the Dow Jones industrial average was down 75.72 points, or 0.85%, to 8,686.57, and the Nasdaq composite index was down 11.68 points, or 0.63%, to 1,837.72 early Monday.
McDonald’s Corp. reported a 5.1% increase in May sales at restaurants open at least 13 months, led by strong demand in Europe and Asia. The world’s No. 1 hamburger chain said it’s Dollar Menu has been a hit during the recession making the fast food giant the industry’s top performer. May same-restaurant sales were up 2.8% in the U.S. Shares at McDonald’s were at US$57.75 US, down US$2.12.
Overseas markets were mostly lower Monday. In Europe, retreating commodity prices and banking stocks weighed markets down. London’s FTSE 100 index was down 1.26%, to 4,382.58 at midday. In Frankfurt, Germany’s DAX was down 1.53% to 4,999.23. The Paris CAC was down 1.55% to 3,287.45.
In Asia, Japan’s Nikkei stock average closed up 1% to 9,865.63. Hong Kong’s Hang Seng index was down 2.28% to 18,253.39.
