The Toronto stock market moved lower at mid-morning Tuesday as commodity prices slumped and some fresh concerns about the health of European banks rattled overseas markets.
The S&P/TSX composite index lost 44.97 points to 12,099.95.
The energy sector fell 1.1 per cent as the October crude contract on the New York Mercantile Exchange tumbled $1.67 to US$72.93 a barrel.
The drop in oil prices came as the U.S. dollar rose against the euro and investors assessed the strength of both the U.S. economy and demand for crude. The greenback’s surge against the euro pushed down oil prices by making crude more expensive for investors trading in the weakening currencies.
Shares in Suncor Energy Inc. (TSX:SU) fell 40 cents to C$33.50.
The financial sector was also weak, losing 1.3 per cent after the Wall Street Journal said Europe’s major banks have more potentially risky government debt on their books than was disclosed during stress tests earlier this year.
Meanwhile, the Financial Times said Germany’s Top Ten banks will have to raise as much as 105 billion euros to meet new capital requirements.
Shares in Toronto-Dominion Bank (TSX:TD) lost 90 cents to $73.50.
The base metals sector was the biggest loser in mid-morning trading, tumbling 2.4 per cent as the December copper contract fell 4.35 cents to US$3.46 per pound.
Shares in HudBay Minerals Inc. (TSX:HBM) were down 17 cents to C$15.15.
The December gold contract gained $9.20 to US$1,260.30 an ounce as jittery investors moved into the safe-haven investment following a report Friday that the jobless rate south of the border rose in August to 9.6 per cent from 9.5 per cent in July.
The gold sector gained 2.1 per cent. Shares in Barrick Gold Corp. (TSX:ABX) added $1.21 or 2.6 per cent to C$48.30.
The Canadian dollar fell 0.52 of a cent to 95.70 cents US ahead of the Bank of Canada’s interest rate announcement on Wednesday.
Economists say there’s a 50-50 chance the central bank will raise rates by another quarter point, reflecting a slowdown in the Canadian and particularly the U.S. economies over the last quarter.
The Bank of Canada has raised rates from an historic low of 0.25 per cent twice this year, in June and July, as the Canadian economy mended from recession faster than just about any other country.
The TSX Venture Exchange rose 13.85 points to 1,579.81.
On Wall Street, stock markets also moved lower. The Dow Jones industrial average fell 77.12 points to 10,370.81, while the Nasdaq composite index was down 14.82 points to 2,218.93. The S&P 500 lost 9.52 points to 1,094.99.
A barrage of mostly better-than-anticipated economic data sent stocks sharply higher last week, with the TSX rising 2.23 per cent to a three-and-a-half month high. This week, investors could be taking their cues from overseas because there are few domestic economic reports due out that could sway traders.
In economic news, the European Union agreed to create new financial oversight institutions Tuesday, hoping to prevent a repeat of the government debt crisis that nearly left Greece bankrupt and brought the European banking system to its knees. However, the finance ministers failed to agree on the introduction of a levy on banks or on a new tax on financial trading.
And the Obama administration is trying to jump-start its sputtering plan to tackle the foreclosure crisis with an effort to assist up to 1.5 million U.S. homeowners who owe more on their properties than their homes are worth.
In corporate news, shares in Alimentation Couche-Tard Inc. (TSX:ATD.B) fell 31 cents to C$23.69 after Casey’s General Stores rejected the convenience store chain’s latest takeover offer and said it has decided to conduct negotiations with another suitor offering US$40 cash per share.
Private equity firm Onex Corp. (TSX:OCX) said it has agreed to acquire the remaining 75 per cent interest of U.S. in-home care firm ResCare that it doesn’t already own for US$340 million. Shares in Onex lost 31 cents to C$28.74.
And Enbridge Inc. (TSX:ENB) said it has agreed to provide pipeline and terminal services to Husky Energy Inc. (TSX:HSE) for its Sunrise oilsands project in Fort McMurray, Alta. Shares of Enbridge gained three cents to $53.18, while shares of Husky added six cents to $25.60.
Overseas, Britain’s FTSE 100 fell 0.7 per cent, Germany’s DAX index dropped 0.9 per cent, and France’s CAC-40 fell 1.5 per cent. Japan’s Nikkei stock average fell 0.8 per cent and Hong Kong’s Hang Seng index gained 0.2 per cent.
