The Toronto stock market turned slightly lower late Tuesday morning as traders weighed earnings results and data showing the effect of a slowdown in China's property market.
The S&P/TSX composite index was 11.76 points lower to 15,227.02.
Mining stocks were negative and copper prices fell as data showed that service industries in the world's second-biggest economy grew at the slowest rate last month since November 2005. The HSBC index of China service businesses activity based on a survey of 400 companies fell to 50.0 in July from 53.1 in the previous month.
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The Canadian dollar was down 0.23 of a cent to 91.29 cents (U.S.).
U.S. indexes were back in the red even as the latest readings on the U.S. non-manufacturing sector and factory orders beat forecasts.
The Dow Jones industrials gave back a good chunk of Monday's 76-point climb, down 48.39 points to 16,520.89, the Nasdaq fell 5.57 points to 4,378.32 and the S&P 500 index was down 5.3 points to 1,933.69.
The U.S. Institute for Supply Management's nonmanufacturing index showed solid expansion, climbing to 58.7 in July from 56 in June, versus the 56.5 gain that economists had expected.
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June factory orders climbed 1.1 per cent after dropping 0.5 per cent, much better than the 0.6 per cent rise that was expected.
The lacklustre showing on markets followed sharp losses on the TSX and N.Y. markets last week, with the Toronto market losing 1.55 per cent and the Dow industrials sliding 2.75 per cent. Among other things, traders fretted over the prospect of the Federal Reserve hiking interest rates sooner than thought after second quarter economic growth came in much better than expected.
But analysts also point to the fact that the rally on stock markets has been going practically without interruption for over five years and that a retracement could be in the cards.
"It's a pause for investors to take another hard look at what things look like going forward," said Stephen Carlin, vice president and senior portfolio manager at CIBC Asset Management.
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"We don't see this as a longer-term trend in the prospects for the market going forward."
Resource stocks were lower amid lower commodity prices.
The base metals sector lost 0.43 per cent as September copper slipped four cents to $3.21 (U.S.) a pound.
The gold sector shed 1.15 per cent while December bullion faded $3.30 to $1,285.60 an ounce.
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September crude declined 75 cents to $97.54 a barrel and the energy sector eased 0.11 per cent.
The TSX found strength from the industrials and telecom sectors.
Meanwhile, the Canadian earnings season remains in high gear with reports out this week from a variety of major corporations.
The consumer staples sector was up 0.5 per cent with Saputo shares up 67 cents to $68.24 after Canada's largest dairy producer reported that quarterly net income rose to $145.3-million or 73 cents a share, up from $136.7-million, or 69 cents, a year ago. The company also said that it is boosting its quarterly dividend and splitting its stock two-for-one through a special payment to shareholders.
Target shares were down three per cent to $58.93 in New York as the retailer lowered its forecast for its second quarter because of costs related to a massive data breach and the repayment of debt.