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Secretary of State John Kerry speaks at the State Department in Washington, Monday, Aug. 26, 2013, about the situation in Syria. Kerry said chemical weapons were used in Syria, and accused Assad of destroying evidence. (Manuel Balce Ceneta/AP)
Secretary of State John Kerry speaks at the State Department in Washington, Monday, Aug. 26, 2013, about the situation in Syria. Kerry said chemical weapons were used in Syria, and accused Assad of destroying evidence. (Manuel Balce Ceneta/AP)

At the open: Stocks decline amid worries over Syria, oil jumps Add to ...

The Toronto stock market was lower Tuesday, joining other global markets in pulling back amid worries about the possible ramifications of western countries intervening in Syria’s civil war.

Selling pressure extended to most financials even as two of the big Canadian banks turned in strong earnings reports.

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The S&P/TSX composite index lost 27.96 points to 12,732.34 with losses limited by a strong run-up in gold stocks as geopolitical uncertainty send bullion prices higher.

Bank of Montreal (TSX:BMO) posted net income of $1.137-billion or $1.68 cents per share, up from $970-million or $1.42 per share in the same year-earlier period. Revenue rose to $4.05-billion from $3.88-billion. Adjusted net income was $1.136-billion, also $1.68 cents per share. Analysts expected $1.52 in adjusted earnings per share and revenue of $3.96-billion and BMO shares gained 34 cents to $66.12.

Scotiabank increased its quarterly dividend by two cents to 62 cents per share and posted quarterly net income of $1.768-billion or $1.37 per diluted share, compared with net income of $2.051-billion or $1.69 per diluted share in the same year-earlier period. Revenue rose to $5.52-billion from $5.51-billion. Last year’s results benefited from an after-tax gain of $614-million on the sale of Scotia Plaza in Toronto. Excluding special items, profit rose 17 per cent to $1.32 a share, beating estimates by two cents but its shares slipped 32 cents to $58.37.

The Canadian dollar declined 0.2 of a cent to 95.03 cents US as traders sought the perceived save haven of the U.S. currency.

U.S. indexes were sharply lower a day after U.S. Secretary of State John Kerry claimed it was “undeniable” that the Syrian government had used chemical weapons. The prospect of U.S.-led military action against the Assad regime was enough for investors to cut their exposure to risky assets such as stocks and the Dow Jones industrials fell 66.05 points to 14,880.41.

The Nasdaq was down 30.76 points to 3,626.81 while the S&P 500 index lost 11.57 points to 1,645.21.

The TSX gold sector ran up 2.4 per cent as geopolitical worries boosted gold prices with the December contract on the Comex division of the New York Mercantile Exchange running ahead $24 to $1,417.10 (U.S.) an ounce. Barrick Gold (TSX:ABX) climbed 46 cents to $21.98 (Canadian).

The energy sector rose 0.2 per cent while the price of oil moved well above $108 (U.S.) a barrel Tuesday on the latest round of worry centred around the Middle East. The October crude contract on the New York Mercantile Exchange ran ahead $2.95 to $108.87 a barrel as traders assessed the potential for international intervention in Syria. Canadian Natural Resources (TSX:CNQ) gained 57 cents to $32 (Canadian).

The price of oil has risen more than 15 per cent in the past three months on concern that unrest in Egypt and civil war in Syria could disrupt production and exports, especially in Libya and Iraq. It has also raised the spectre of spreading violence that could block important supply routes.

The base metals component was slightly lower even as copper also advanced, with the September contract in New York up four cents at $3.36 (U.S.) a pound. Turquoise Hill Resources (TSX:TRQ) gained six cents to $5.65 (Canadian).

Industrials led decliners as Canadian National Railways (TSX:CNR) fell $1.30 to $99.19.

European bourses were negative as London’s FTSE 100 fell 0.84 per cent, Frankfurt’s DAX declined 1.95 per cent while the Paris CAC 40 lost 2.17 per cent.

Earlier in Asia, Japan’s Nikkei 225 index fell 0.7 per cent , Hong Kong’s Hang Seng dropped 0.6 per cent and South Korea’s Kospi shed 0.1 per cent.

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