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(FRANK GUNN/THE CANADIAN PRESS)
(FRANK GUNN/THE CANADIAN PRESS)

At midday: TSX slips amid major corporate news Add to ...

The Toronto stock market was lower Tuesday amid falling gold stocks, but the TSX found support from major corporate developments in the tech, energy and health care sectors.

The S&P/TSX composite index dropped 24.87 points to 13,336.91.

Shares of Encana Corp. (TSX:ECA) were up after the natural gas giant said it will create a new public company that will focus on southern Alberta. The Calgary-based company also announced it would cut its quarterly dividend to seven cents from 20 cents and slash its workforce by 20 per cent as it struggled with persistently low prices. Its stock gained 92 cents or five per cent to $19.51.

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Shares in Open Text (TSX:OTC) ran ahead $4.88 or 6.29 per cent to $82.43 as the software company said that it is buying U.S.-based cloud-technology provider GXS Group in a cash-and-stock deal valued at approximately $1.17 billion. GXS Group Inc. a will become a subsidiary of Open Text based in Waterloo, Ont.

And in the health sector, Endo Health signed a deal to buy Canadian specialty drug maker Paladin Labs (TSX:PLB) in a cash-and-stock deal worth about C$1.6 billion. Both Endo and Montreal-based Paladin will then be folded into a newly-formed Irish holding company. Paladin stock soared $30.69 or 48 per cent to $94.60.

The Canadian dollar was down 0.26 of a cent to 95.73 cents US.

U.S. indexes were lower amid a string of economic data coming out during the week, culminating in the latest U.S. employment report.

The Dow Jones industrials were 31.25 points lower to 15,607.87, the Nasdaq declined 2.25 points to 3,934.34 and the S&P 500 index lost 3.96 points to 1,763.97.

At mid-morning, the Institute for Supply Management said its non-manufacturing index for October showed higher than expected expansion with a reading of 55.4. Economists had expected the index to come in at 54.

That data, along with third-quarter economic growth figures on Thursday will go a long way to determining when the U.S. Federal Reserve will start to reduce its monetary stimulus.

Traders are, if anything, more uncertain about when the Fed might cut back on those US$85 billion of monthly bond purchases after last week’s central bank meeting left them with the impression that tapering could start as soon as December.

“Certainly we’re more confused than ever in terms of when this tapering is going to start,” said Kash Pashootan, vice-president and portfolio manager at First Avenue Advisory, a Raymond James company.

“And I believe that whether it’s December or March, it doesn’t really have a material impact one way or another. It’s just that they don’t know.”

The gold sector led decliners, down almost one per cent as December bullion gave back $6.10 to US$1,308.60 an ounce. Iamgold (TSX:IMG) lost 14 cents to $5.25.

Financials also dragged as Sun Life Financial (TSX:SLF) fell 31 cents to $34.99.

The TSX energy sector was little changed while December crude on the New York Mercantile Exchange lost 88 cents to US$93.74 a barrel. Oil has fallen about three per cent over the past week as data showed greater than expected inventory levels in the U.S.

The TSX base metals sector turned flat with December copper unchanged at US$3.25 a pound.

Traders are also absorbing a run of corporate earnings reports this week.

On Tuesday, WestJet Airlines Ltd. (TSX:WJA) said net income in the third quarter was $65.1 million or 50 cents a share, a decline of 7.8 per cent from the same time last year but two cents better than expected. Total revenue grew to $924.8 million from $866.5 million a year earlier, an increase of 6.7 per cent and its shares added four cents to $27.34.

Meanwhile, traders also looked to the monthly policy meeting of the European Central Bank. Until last week’s news that the annual inflation rate in the 17-country eurozone fell to just 0.7 per cent in October, no change in policy was expected. Now, many economists think the ECB will either reduce its main interest rate to a record low of 0.25 per cent or hint at future easing.

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