The Toronto stock market dipped back into negative territory near midday in a wavering trading session characterized by concerns about the global economy.
The S&P/TSX composite index was down 21.87 points to 12,166.77 as traders weighed economic news ahead of the launch of U.S. earnings season with a report from Alcoa after markets close.
A new report from the Bank of Canada said that businesses pessimism is on the rise with confidence notably lower than the highs reached after Canada emerged from recession in mid-2009.
More businesses responding to the Bank of Canada survey said they are discouraged about future sales prospects, with more companies expecting slower sales this year. That's the first decline in nearly three years, the bank said.
The Canadian dollar was down 0.01 of a cent to 97.36 cents (U.S.) after dropping to 96.90 cents earlier in the session, the weakest it has been since Dec. 20.
Investors are also looking to the unofficial launch of U.S. earnings season with Alcoa Inc.’s fourth-quarter results, after the closing bell. The aluminum company is considered a gauge of the economy because its products are so widely used.
On Wall Street, the Dow Jones industrials slid 17 points to 12,343. The Nasdaq composite index slid eight points at 2,666 and the S&P 500 index was off two points at 1,276.
“Overall, investors are really in a wait-and-see mode,” said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis.
“While the TSX and the U.S. markets opened the year stronger, investors continue to be worried about what's going on in Europe, and whether we'll see good news from European leaders hoping to resolve the debt crisis.”
In corporate news, Canada's largest publicly traded miner Teck Resources Ltd. (TSX:TCK.A) is moving to solidify its position in the oil business, offering more than $435-million for its oilsands partner SilverBirch Energy Corp. (TSXV:SBE). The transaction is valued at $8.50 cash for each SilverBirch share plus one share of a new company, to be called SilverWillow Energy Corp. Teck shares dropped 75 cents to $37.60.
Commodity prices weakened with the February crude on the New York Mercantile Exchange down $1.35 at $100.21 (U.S.) a barrel. The energy sector dropped 0.14 per cent.
The gold sector gained 0.16 per cent as the February bullion contract fell $5.50 to $1,611.30 (U.S.) an ounce.
Statistics Canada says the value of building permits issued in November fell 3.6 per cent to $6.1-billion after a strong October. The declines were especially prominent in Ontario where non-residential permits helped offset gains in the value of residential permits.
In other corporate developments, Canadian Pacific Railway Ltd. (TSX:CP) is standing by its chief executive officer, saying its board of directors has unanimously decided it's “not in the best interests” of CP or its shareholders to replace Fred Green.
The CEO has been targeted for removal by a American financier who controls nearly 15 per cent of the company's outstanding stock. He wants the former CEO of Canadian National to take the leadership role.
International markets were widely lower as traders remain focused on Europe's stumbling efforts to get a handle on its debt crisis. French President Nicolas Sarkozy and German Chancellor Angela Merkel met Monday, a month after all 27 EU countries except Britain agreed to thrash out a new treaty by March to enforce tougher budget controls.
In Europe, London's FTSE 100 index slipped 0.62 per cent, Frankfurt's DAX lost 0.73 per cent while the Paris CAC 40 was off 0.53 per cent.
In Asia, Japan's Nikkei 225 was closed for a holiday while Hong Kong's Hang Seng Index ended up 1.47 per cent.