TORONTO – Weakness in metals prices weighed on mining stocks, pushing the Toronto stock market to a lower close Monday.
Toronto’s S&P/TSX composite index gave back 51.11 points to close at 13,382.38, while the loonie was down 0.15 of a U.S. cent at 74.78 cents US.
On commodity markets, the December gold contract fell 9.50 to US$1,066.80 an ounce, while December copper pulled back three cents to US$2.02 a pound.
The metals and mining sector was the lead decliner on the TSX, slipping 3.52 per cent, while materials was down 0.12 per cent.
Elsewhere in commodities, the January crude oil contract erased earlier gains, closing down 15 cents at US$41.75 a barrel as worries about rising inventories outweighed earlier news that Saudi Arabia is contemplating slashing its production in a bid to boost prices.
The January contract for natural gas gained 5.2 cents to US$2.343 per mmBtu.
Meanwhile, the TSX capped telecom services sector moved 0.75 per cent higher after Manitoba Telecom (TSX:MBT) announced a $465-million deal to sell its Allstream division to U.S.-listed Zayo Group Holdings Inc. MBT shares were up $1.56 or more than five per cent at $30.15.
In New York, indexes were lower after turning in some of their best performances of the year last week. The Dow Jones industrials lost 31.13 points to 17,792.68, while the broader S&P 500 index slipped 2.58 points to 2,086.59 and the Nasdaq declined 2.44 points to 5,102.48.
Todd Mattina, chief economist and strategist at Mackenzie Investments, said investors are eagerly anticipating the December meeting of the U.S. Federal Reserve.
While it’s expected that the central bank will raise its benchmark interest rate at the meeting, Mattina said investors are more interested in the Fed’s updated guidance on future rate hikes.
“There’s really a substantial gap between what the Fed is expecting and what the market is currently pricing for future interest rates,” Mattina said.
“What is so important about the December meeting will be to see if the Fed lowers its expectations for future interest rates towards what the market is pricing, or whether the Fed continues to keep a fairly optimistic path on how aggressively it wants to raise rates.”
In other corporate news, Pfizer (NYSE:PFE) and Allergan (NYSE:AGN) announced a deal to combine the two companies to create the largest drug company in the world. Pfizer, the maker of Viagra and Lipitor, will buy Botox maker Allergan for about $155 billion in a mostly stock in a deal that will see Pfizer will also become based in Ireland, reducing its tax bill.
Pfizer shares slipped 85 cents, or nearly three per cent, to US$31.33, while Allergan stock fell $10.74, or 3.4 per cent, to US$301.72.
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