Falling mining stocks left the Toronto stock market little changed mid-morning Monday.
The S&P/TSX composite index slipped 3.14 points to 13,375.19 amid generally lacklustre trading as banks, many businesses and the bond market closed for Remembrance Day and Veterans Day in the U.S.
On international markets, the Canadian dollar was trading at 95.44 cents US, unchanged from Friday’s close.
U.S. indexes were mainly higher with the Dow Jones industrials ahead 18.37 points to 15,780.15, the Nasdaq was down 4.58 points at 3,914.65 and the S&P 500 index was up 0.67 of a point to 1,771.28.
North American markets racked up a solid gain Friday in the wake of a much stronger than expected American jobs reports for October as the economy created 204,000 jobs. That was the second indicator in as many days of improving economic strength as other data showed third quarter U.S. economic growth came in higher than expected.
While indications of economic strength were welcomed, they also raised concerns that the U.S. Federal Reserve could start cutting back on its monthly US$85 billion of bond purchases as early as the end of next month.
The major economic event of the week likely occurs Thursday. That’s when the U.S. Senate Banking Committee will quiz Janet Yellen, president Barack Obama’s candidate to become the next chair of the central bank.
Yellen has a reputation for being a dove as far as stimulus is concerned and traders will be listening for any hints as to whether she thinks the economy is strong enough to start tapering a key stimulus measure that has supported a strong rally on many stock markets.
On the economic front later in the week, investors take in the latest reading on Canada’s trade balance and manufacturing shipments. Markets will also absorb U.S. trade data along with industrial production figures.
The gold sector led TSX decliners, down 1.63 per cent as December bullion was down $2.70 to US$1,281.90 an ounce. Goldcorp (TSX:G) faded 35 cents to C$25.36 while Barrick Gold (TSX:ABX) shed 25 cents to $18.82. Gold stocks and bullion prices have been under renewed pressure amid increasing speculation that the Fed is set to back off on its asset purchases, which has in turn pushed the greenback higher.
The base metals sector gave back 0.6 per cent with December copper unchanged at US$3.25 a pound. Teck Resources (TSX:TCK.B) shed 31 cents to C$28.06.
The energy sector was slightly higher as the December crude contract on the New York Mercantile Exchange erased early losses to move up 13 cents to US$94.73 a barrel. Talisman Energy improved by 17 cents to C$12.59.
The tech sector led advancers amid acquisition activity between two major telecom equipment companies.
Telecom Mitel Networks Corp. (TSX:MNW) will acquire Aastra Technologies Ltd. (TSX:AAH) in a stock and cash deal valued at about $400 million. The combined company would have about US$1.1 billion of total revenue, with a global customer base and an opportunity to tap into demand for equipment that supports cloud computing. Mitel shares gained two cents to $7.11 while Aastra shares surged $3.76 or 13.32 per cent to $31.99.
Shares in Manulife Financial Corp. (TSX:MFC) were three cents lower to $19.69 after the insurance giant became the latest big-name investor to buy into a $1-billion financing deal for struggling smartphone maker BlackBerry (TSX:BB). Fairfax Financial Holdings Ltd. (TSX:FFH) is leading the financing, which is being done through an issue of six per cent convertible debentures.
Other partners include Mackenzie Financial Corp., Canso Investment Counsel Ltd., Markel Corp., Brookfield Asset Management Inc. and Qatar Holding LLC. BlackBerry shares climbed seven cents to $6.91.
In other corporate news, SouthGobi Resources Ltd. (TSX:SGQ) is restating its financial reports for the first half of 2013 and the previous three years, and reporting bigger third-quarter loss than analysts expected. The Mongolia-focused coal company’s results fell short of estimates compiled last week before the restatements were issued Monday morning. Its shares shed seven cents to $1.
In the retail sector, Sears Canada Inc. (TSX:SCC) is selling its 50 per cent interest in eight properties for about $315 million to Montez Income Properties Corp. Two weeks ago, it announced it would close five stores as part of a deal to sell its rights to the retail space in Toronto’s Eaton Centre and four other locations for $400 million. Its shares gained $1 to $17.