The Toronto stock market was lower in early trading Monday even as commodity prices headed higher and investors tried to put aside worries about debt problems in Europe.
The S&P/TSX composite index lost 52.1 points to 11,171 after rising 1.16 per cent last week.
Most of that rise came Friday in the wake of better than expected Canadian and U.S. employment reports for January.
Markets have been pressured by fears about unsustainable government debt in several European countries, particularly Portugal and Greece. Those concerns intensified last week, undermining the euro, after Portugal’s lawmakers defeated the government over its deficit reduction plan.
The worries also boosted the value of the U.S. dollar last week, which in turn helped push commodity prices lower.
Despite a lack of commitment to a bailout from the European Union or any concrete rescue plans from policy makers at the G7 meeting of finance ministers this weekend in Iqaluit, experts said countries like Greece or Portugal were unlikely to be stranded or allowed to default.
“A solution for Greece will be found, either from within the country or from the wider eurozone,” said Daragh Maher, an analyst at Calyon Securities.
“On a number of fronts the pessimism looks overdone, notably in relation to the performance of the global economy.”
The Canadian dollar moved up 0.11 to 93.61 cents US.
The financial sector led TSX decliners, down 0.64 per cent, as Manulife Financial Corp. (TSX:MFC) gave back 22 cents to $19.02 and National Bank (TSX:NA) gave back 47 cents to $57.01.
Oil prices headed higher after three days of declines with the March crude contract on the New York Mercantile Exchange ahead 38 cents to US$71.57. But the energy sector moved down 0.44 per cent.
The gold sector was down 0.8 per cent even as the April gold contract on the Nymex gained $12.90 to US$1,065.70 an ounce. Barrick Goldcorp. (TSX:ABX) faded 43 cents to $38.02.
March copper added three cents to US$2.88 a pound and the base metals sector was down 0.4 per cent. Ivanhoe Mines (TSX:IVN) lost 50 cents to $14.10 but Teck Resources (TSX:TCK.B) gained 50 cents to $34.70.
The TSX Venture Exchange moved up 8.51 points to 1,463.92.
New York markets were also lower on top of a losing week.
The Dow Jones industrials were 25 points lower to 9,987.2 after losing 55 points on the week.
The Nasdaq composite index was down 3.7 points to 2,137.42 while the S&P 500 index lost 2.9 points to 1,063.3 after shedding more than one per cent last week.
In economic news, Canada Mortgage and Housing Corp. reported that the annual rate of housing starts reached 186,300 in January, up from 176,100 in December. The agency added that actual housing starts for 2009 totalled 149,081 units, with activity improving as the year progressed.
Investors also pored over the last earnings reports.
Mining company Xstrata PLC on Monday reported a 41 per cent drop in full-year net profit as last year’s economic downturn and the weakness of the dollar affected global commodity sales. Profit fell to US$2.77 billion.
Xstrata is a major player in Canada’s mining industry after it acquired the former Falconbridge nickel miner a few years ago.
Brookfield Infrastructure Partners LP (TSX:BIP.UN) had a net loss of US$7.7 million in the fourth quarter of 2009, the limited partnership announced Monday. Despite the red ink, the limited partnership says its quarterly distribution will increase to 27.5 cents US per unit, an increase of one cent or 3.8 per cent.
Brookfield Infrastructure was established by Toronto-based Brookfield Asset Management Inc. (TSX:BAM.A) to operate long-life assets with stable cash flows. On the TSX, its units gained 19 cents to C$17.41.
Hasbro Inc., the second biggest toymaker in the U.S., said Monday its profit surged 77 per cent to US$165.6 million in the fourth quarter. The owner of the Transformers, Tonka and Playskool brands also said it expects sales and earnings per share to grow this year although it didn’t offer specific estimates. Hasbro shares ran up $3.01 to US$33.81.
Elsewhere, the Canpotex marketing partnership has agreed to sell 350,000 tonnes of Canadian potash to China’s Sinofert. The fertilizer ingredient was sold at "competitive prices" on the spot market and is to be shipped before the end of March. Canpotex is owned by three companies: PotashCorp. (TSX:POT), Agrium Inc. (TSX:AGU) and Mosaic Corp. (NYSE:MOS). Potash shares gained 45 cents to C$111.50 while Agrium dipped six cents to $63.04.
In Asia, Japan’s Nikkei 225 closed at a nearly two-month low, falling 1.1 per cent.
Chinese shares also dropped, but trading was listless, with investors keeping to the sidelines ahead of a week-long Lunar New Year holiday, which begins Saturday. The Shanghai Composite Index lost 0.3 per cent while Hong Kong’s Hang Seng index fell 0.6 per cent.
London’s FTSE 100 index added 0.17 per cent, Frankfurt’s DAX gained 0.73 per cent while the Paris CAC 40 index was up 0.45 per cent.
