The Toronto stock market was slightly lower Tuesday amid falling gold stocks but found support from major corporate developments in the tech, energy and health care areas.
The S&P/TSX composite index was down 14.89 points to 13,346.89 amid major Canadian corporate news.
In the energy sector, natural gas giant Encana Corp. (TSX:ECA) said that it will create a new public company that will focus on southern Alberta. The Calgary-based company is also cutting its quarterly dividend from 20 cents to seven cents, cutting its workforce by 20 per cent and closing its office in Plano, Texas as the company struggles with persistently low prices. Its stock gained 72 cents to $19.31.
In the tech sector, shares in Open Text (TSX:OTC) ran ahead $8.01 or 10.3 per cent to $85.56 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. The companies expect to serve more than 80,000 customers once the transaction closes. GXS Group Inc., a business-to-business service provider, a will become a subsidiary of Open Text based in Waterloo, Ont.
In the health sector, Endo Health has a deal to buy Canadian specialty drug maker Paladin Labs (TSX:PLB) for cash and stock deal worth about $1.5 billion. Both Endo and Montreal-based Paladin will then be folded into a newly-formed Irish holding company. Paladin stock soared $33.69 or 52.71 per cent to $97.60.
The Canadian dollar was down 0.21 of a cent to 95.78 cents US.
U.S. indexes were lower ahead of a series of economic data coming out during the week, culminating in the latest U.S. employment report.
That data, along with the latest reading on the U.S. service sector later Tuesday and third quarter economic growth figures on Thursday will go a long way to determining when the Federal Reserve will start to reduce its monetary stimulus.
The Dow Jones industrials were 86.76 points lower to 15,553.07, the Nasdaq declined 17.03 points to 3,919.56 and the S&P 500 index lost 8.09 points to 1,759.84.
Other data released Tuesday showed a measure of U.S. home prices rose only slightly in September from August amid higher mortgage rates and slowing home sales.
The TSX energy sector was up a slight 0.1 per cent while December crude on the New York Mercantile Exchange lost 48 cents to US$94.14 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 backed off 0.6 per cent with December copper unchanged at US$3.25 a pound. Taseko Mines (TSX:TKO) shed four cents to $2.14.
The gold sector led decliners, down 0.6 per cent as December bullion gave back 80 cents to US$1,313.90 an ounce. Iamgold (TSX:IMG) lost 12 cents to $5.27.
Expectations for October job creation in the U.S. are modest with economists forecasting that the economy cranked out only about 125,000 while the jobless rate ticked up 0.1 of a point to 7.3 per cent, reflecting private sector employees who were temporarily laid off during the partial U.S. government shutdown.
Canadian employment figures also come out Friday and the consensus calls for the creation of about 10,000 jobs.
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 dipped 10 cents to $27.20.
There was also a reminder of the fragility of the European economic recovery.
The European Commission says that the European Union’s economy is expected to grow 0.5 per cent over the second half of the year, leaving it flat for the whole year, and expand 1.4 per cent in 2014. Its last predictions, issued in May, had expected an economic decline of 0.1 per cent in 2013.
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 euro zone 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.