The Toronto stock market was lower Monday as worries about economic conditions weighed on buyers despite positive earnings from the American financial sector and economic data from China and the U.S. that beat expectations.
The S&P/TSX composite index fell 41.28 points to 12,160.76 led by losses in the gold sector, while the TSX Venture Exchange slipped 2.44 points to 1,290.37.
The tepid performance on the TSX follows a 1.74 per cent slide last week as buyers were discouraged by another downward revision to global economic growth by the International Monetary Fund.
The Canadian dollar gained 0.12 of a cent to 102.23 cents US as risk appetite increased amid rumours that China's central bank could cut banks' reserve requirements to encourage lending.
U.S. markets were higher as Citigroup turned in a positive earnings report. Earnings per share for the third quarter, excluding extraordinary items, came in at $1.06, a dime better than analyst estimates. Revenue, after special charges, was $19.4 billion, beating expectations of $18 billion and its shares ran up 2.5 per cent to US$35.63.
The earnings season kicks into high gear this week with 40 per cent of the Dow components reporting.
The Dow Jones industrials were up 18.22 points to 13,347.07 the Nasdaq composite index gained 4.65 points to 3,048.76, while the S&P 500 index was ahead 1.19 points to 1,429.78.
Buyers were also encouraged by data showing that U.S. retail sales rose sharply in September in a reflection of higher consumer confidence and improvement in the job market. The Commerce Department said retail sales rose 1.1 per cent in September after a 1.2 per cent gain in August, which was revised higher. Both increases were the largest since October 2010.
Other data released Sunday showed that China's consumer price index for September rose 1.9 per cent from a year earlier, down from a two per cent advance during August.
A report released late Friday after North American markets closed showed that China's international trade surplus widened to $27.7 billion. Exports unexpectedly jumped 9.9 per cent year over year, which was the best pace in three months.
"The figures are certainly encouraging and suggest that exports may have bottomed early in Q3, as the growth rate accelerated in each of the past two months," said BMO Capital Markets senior economist Benjamin Reitzes.
"However, we'll need to see the rest of the September figures before making that assertion for the broader economy."
China's third quarter economic growth data will be released Friday. GDP growth is expected to ease to 7.4 per cent year over year, which would be the slowest pace since the first quarter of 2009. China has taken a series of steps over the last couple of years to slow its red-hot economy in order to get a grip on unacceptably high inflation levels.
The gold sector led decliners, down 0.7 per cent as the December bullion contract declined $14.10 to US$1,745.60 an ounce. Barrick Gold Corp. (TSX:ABX) faded 37 cents to C$37.94.
Argonaut Gold Inc. (TSX:AR) shares fell 94 cents to $9.54 as the company announced plans to acquire Prodigy Gold Inc. (TSXV:PDG) for shares and cash in a friendly deal valued at $341 million. Current Argonaut shareholders would own about 78 per cent of the company after the transaction and Prodigy shareholders 22 per cent. Prodigy shares surged 27 cents to 96 cents.
The energy sector was down 0.2 per cent while oil prices moved lower with the November contract on the New York Mercantile Exchange down 60 cents to US$91.26 a barrel. Canadian Natural Resources (TSX:CNQ) lost 26 cents to C$29.99.
Copper prices failed to find lift from the Chinese data with the December contact off a penny at US$3.70 a pound and the base metals sector was little changed. Capstone Mining (TSX:CS) dipped four cents to C$2.33.
The company formerly known as Ivanhoe Mines says it has rejected the Mongolian government's request to renegotiate an investment agreement for the Oyu Tolgoi mine, one of the world's biggest new copper developments. Turquoise Hill Resources (TSX:TRQ) said that Mongolia's mine minister had written to request a renegotiation of a deal signed in October 2009 but the company says the deal is a binding agreement. Its shares declined 23 cents to $8.33.
The financials sector led advancers, up 0.2 per cent as Manulife Financial (TSX:MFC) gained 10 cents to $11.95.
New York indexes shed about two per cent last week amid a mixed reception to the start of the quarterly earnings season. Companies ranging from Alcoa to Wells Fargo put up numbers that were hardly weak but still gave investors reason to pause.
Traders also took in major acquisition activity in the telecom sector. Japan's Softbank Corp. has reached a deal to buy 70 per cent of U.S. mobile carrier Sprint Nextel Corp. for US$20.1 billion. The agreement will combine the third biggest mobile carriers of both Japan and the U.S.
London's FTSE 100 index gained 0.45 per cent, Frankfurt's DAX was up 0.68 per cent while the Paris CAC 40 climbed 1.15 per cent.
Earlier in Asia, Japan's Nikkei 225 index rose 0.5 per cent, Hong Kong's Hang Seng rose less than 0.1 per cent while South Korea's Kospi fell 0.4 per cent.
However, mainland China's Shanghai Composite Index lost 0.3 per cent and the smaller Shenzhen Composite Index lost 0.7 per cent.