TORONTO -- The Toronto stock market was lower Monday 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 28.69 points to 12,173.35 led by losses in the gold sector, while the TSX Venture Exchange slipped 6.67 points to 1,286.15.
The Canadian dollar lost early momentum, dropping 0.12 of a cent to 101.99 cents US as commodities retreated and traders took in the Bank of Canada's latest business outlook survey. The quarterly survey of top executives at 100 firms across the country shows a corporate sector that is far more concerned about the future than it was only three months ago, and planning accordingly.
U.S. markets advanced as Citigroup turned in earnings per share for the third quarter, excluding extraordinary items, of $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 3.57 per cent to US$35.99.
The earnings season kicks into high gear this week with 40 per cent of the Dow components reporting.
The Dow Jones industrials was up 25.93 points to 13,354.78, the Nasdaq composite index added 0.97 of a point to 3,045.08 and the S&P 500 index was up 2.14 points to 1,430.73.
Buyers were also encouraged by data showing that U.S. retail sales rose sharply in September, up 1.1 per cent 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 in August.
A report released late Friday after North American markets closed showed that China's international trade surplus widened to $27.7 billion in September. Exports unexpectedly jumped 9.9 per cent year over year, which was the best pace in three months.
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 1.33 per cent as the December bullion contract declined $23.70 to US$1,736 an ounce. Barrick Gold Corp. (TSX:ABX) faded 60 cents to C$37.71.
Argonaut Gold Inc. (TSX:AR) shares fell 60 cents to $9.88 as the company announced plans to acquire Prodigy Gold Inc. (TSXV:PDG) for shares and cash in a friendly deal valued at $341 million. Prodigy shares surged 31 cents to $1.
The energy sector was down 0.76 per cent while oil prices moved lower with the November contract on the New York Mercantile Exchange down $1.80 to US$90.06 a barrel. Canadian Natural Resources (TSX:CNQ) lost 59 cents to C$29.66.
Copper prices failed to find lift from the Chinese data with the December contact off four cents at US$3.67 a pound and the base metals sector dropped 1.18 per cent. Capstone Mining (TSX:CS) dipped five cents to C$2.32.
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 the deal is a binding agreement. Its shares declined 46 cents to $8.10.
Financials led advancers with Scotiabank (TSX:BNS) ahead 25 cents to $53.47.
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.
But markets have been driven higher since the lows of early June on expectations that central banks would step up to keep the global recovery on the rails.
European Central Bank Mario Draghi said in early August that the ECB would do whatever was necessary to preserve the monetary union. And U.S. Federal Reserve chairman Ben Bernanke followed up with another round of quantitative easing.
"We had a big run-up in front of it because Bernanke had pretty much telegraphed his intentions, the market rose in anticipation and now with that having been taken care of, it just kind of goes from sideways to down," said Robert Gorman, chief portfolio strategist at TD Waterhouse.
Markets have also failed to find lift from the third-quarter earnings season, which got under way last week. Expectations are muted with analysts expecting a 2.1 per cent year over year decline in S&P operating earnings, which would be the first year over year drop since the recession that followed the 2008 financial collapse.
"When there have been questions about the economy and so on that have caused the economy to slump, quarterly earnings have come along to change that sentiment," added Gorman,
"And whether or not that will happen this time around is debatable."
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 0.17 per cent, Frankfurt's DAX was up 0.23 per cent while the Paris CAC 40 climbed 0.94 per cent.
