Stocks recovered from some of their worst early losses in mid-day Monday trading, but remain deeply in the red over worries that Europe’s debt crisis is beginning to spiral out of control.
The S&P TSX composite index and the Dow Jones Industrial Average both fell 1.2 per cent, recouping about a third of a sharp decline posted just after the opening bell.
North American equities showed some improvement after markets in Europe stabilized at lower levels. French, Italian German and British stocks all showed drops of 2 per cent to 3 per cent, although equities in Spain, the epicentre of current debt jitters, posted one of the best relative performances, down only .5 per cent.
“Contagion fears have battered European equity markets today as a perfect storm of fears about an imminent Greek exist, and the solvency of Spanish and Italian regions has seen markets drop sharply,” said Michael Hewson, senior market analyst at CMC Markets UK in London.
Stocks in Toronto received a boost after the Chinese bid for oil and gas producer Nexen Inc. Nexen shares surged 51 per cent, in active trading. Shares of Talisman Energy also rallied 6.8 per cent on investor hopes that it might receive a bid.
Research In Motion gained .44 per cent following news that insurer Fairfax Financial has increased its stake in the embattled smartphone provider.
Gold shares were weak in Toronto, with the price for bullion sliding $6.10 (U.S.) to $1,577.90 an ounce. Shares of senior producers Barrick and Goldcorp fell 1.8 per cent and 1.4 per cent respectively.
Life insurers continued to trade sharply lower based on worries that low interest rates and falling stock markets will hit their bottom lines. Sun Life fell 5 per cent, and Manulife and Great-West Lifeco both slid 3.6 per cent.