TSX starts week in the red as Greece optimism fades

By David FriendTORONTO — The Toronto stock market shifted lower after the open on Monday as concerns about the global economy led to weakness across nearly every sector.The S&P/TSX composite index backed off 29.82 points to 11,495.08, as worries from Europe translated overseas.The Canadian dollar dropped 0.37 of a cent to 97.46 cents US.The outcome of the Greek election, which had provided a brief streak of optimism, quickly gave way to another round of concern about Spain’s debt problems.Commodities dropped on the worries, with the July crude contract on the New York Mercantile Exchange down $1.50 at US$82.53 a barrel.Gold bullion dropped $5.50 to US$1,622.60 an ounce while July copper edged up one cent to US$3.40 a pound.On Wall Street, the Dow Jones industrial average was off 50.59 points at 12,716.58. The Nasdaq composite index fell 9.86 points to 2,862.94 and the S&P 500 index dropped 5.14 of a point to 1,337.70.Spain’s ability to manage its debt without an international bailout was thrown into doubt Monday after investors pushed its borrowing rates up to the level at which Greece, Portugal and Ireland had sought help.Investor sentiment improved briefly in the morning as electoral results in Greece suggested the country would not drop out of the euro currency union, a scenario that would have put severe stress on Spain’s markets.But that market relief quickly faded as it became clear that Spain’s fundamental economic and fiscal problems remain huge.European stocks were slightly higher by midday. Britain’s FTSE 100 rose 0.24 per cent while Germany’s DAX added 0.39 per cent and France’s CAC-40 fell 0.62 per cent.Asian stocks greeted the developments in Greece enthusiastically.Tokyo’s benchmark Nikkei 225 index closed up 1.9 per cent to 8,721.02 and Hong Kong’s Hang Seng rose one per cent to 19,427.81. Australia’s S&P/ASX200 added two per cent to 4,136.90, while South Korea’s Kospi climbed 1.8 per cent at 1,891.71.China’s benchmark Shanghai Composite Index added 0.4 per cent to 2,316.05. The Shenzhen Composite Index gained 1.1 per cent to 964.71.In Canada, Yamana Gold Inc. (TSX:YRI) announced the acquisition Monday of Extorre Gold Mines Ltd. (TSX:XG), a miner with a promising gold-silver project in Argentina for about $400 million. Yamana will pay $3.50 in cash and 0.467 of a Yamana share for each Extorre share, while also saying it plans to increase its dividend by 18 per cent. Yamana shares fell 41 cents to $15.94.Celestica Inc. (TSX:CLS) said it will wind down manufacturing services for Research in Motion (TSX:RIM) over the next three to six months. Celestica says it has been working with RIM as the troubled BlackBerry maker assesses its supply chain strategy. Celestica shares were down 3.4 per cent, or 26 cents, to $7.35, while RIM stock rose nine cents to $11.26. read more