The Toronto stock market was lower Monday as a survey showed that Chinese manufacturing shrank in April for the fourth month in a row while traders were cautious amid deteriorating conditions in Ukraine.
The S&P/TSX composite index dropped 66.35 points to 14,698.8 as the HSBC index of Chinese factory activity rose by 0.1 point to 48.1 in April, using a 100-point scale on which readings below 50 indicate contraction.
The gauge also fell short of its already weak preliminary result, raising concerns among investors that the slowdown in the world’s second biggest economy is entrenched.
The Canadian dollar was down 0.01 of a cent at 91.06 cents (U.S.).
U.S. indexes were deep in the red with the Dow Jones industrials down 127.12 points to 16,385.77, the Nasdaq declined 27.17 points to 4,096.73 and the S&P 500 index was off 12.66 points to 1,868.48.
Traders also kept an eye on the deteriorating situation in Ukraine where troops fought pitched gun battles Monday with a pro-Russia militia occupying the eastern city of Slovyansk.
In the last few weeks, anti-government forces have stormed and seized government buildings and police stations in a dozen eastern Ukrainian cities. Authorities in Kyiv blame Russia for backing the insurgents.
The TSX industrial sector led decliners, down one per cent.
The energy sector declined 0.63 per cent as June crude in New York slipped 10 cents to $99.66 (U.S.) a barrel.
The base metals sector gave back 0.65 per cent, while July copper was off a cent at $3.06 a pound.
The gold sector was the only advancer, up 1.3 per cent, as geopolitical worries pushed gold higher for a second day, up $10.40 to $1,313.30 an ounce.
On the corporate front, retailer Target announced Monday that chairman, president and CEO Gregg Steinhafel is stepping down nearly five months after the retailer disclosed a massive security breach, which has hurt its reputation among customers and has derailed its business. Steinhafel’s tenure has been rocky. The company has struggled with its expansion into Canada, its first foray outside the U.S. and its shares fell 1.7 per cent to $60.97.
In the U.S. on Monday, drugmaker Pfizer said its first-quarter profit dropped 15 per cent due to $2.33-billion, or 36 cents per share, amid cheaper generic competition that continues to reduce sales of its multiple medicines and the end of some partnerships with other drug makers. Earnings ex-items were 57 cents a share, two cents better than forecast. Revenue totalled $11.35-billion, down nine per cent and below expectations of $12.08-billion. Its shares fell 2.57 per cent to $29.96.
Ritchie Bros. Auctioneers Inc. reports first-quarter net earnings of $14.3-million or two cents a share, up two per cent. Revenues for the auctioneer of heavy equipment were down three per cent to $98.6-million and its shares dropped $1.13 to $26.45.
It’s a heavy earnings week in Canada where investors will take in reports from major companies including BCE Inc., Sun Life Financial, George Weston and WestJet Airlines on Tuesday. Later in the week, there will be quarterly earnings reports from pipeline company Enbridge, Kinross Gold, Talisman Energy, Tim Hortons, Canadian Natural Resources, Canadian Tire and Valeant Pharmaceuticals.