The Toronto stock market was lower Monday after a strong runup in oil prices raised questions about the durability of the global economic recovery.
The S&P/TSX composite index lost 34.1 points to 12,691.66 and the TSX Venture Exchange was down 2.13 points to 1,687.39.
The decline came after the TSX ended last week up 268.47 points or 2.14 per cent, leaving the main Toronto index up 6.44 per cent year to date, and analysts suggested the performance left indexes vulnerable to a bout of profit-taking.
"Equity markets have been on a very solid run here, not just in 2012 but since those October lows," said Garey Aitken, director of equity research at Bissett Investment Management.
"So at any point in time I think some sort of giveback or correction was somewhat inevitable."
The commodity-sensitive Canadian dollar turned higher as copper prices shook off early declines, rising 0.03 of a cent to 100.06 cents (U.S.).
New York and Toronto indexes also improved after data showed that the number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.
The National Association of Realtors said its index of sales agreements rose two per cent last month to a reading of 97. A reading of 100 is considered healthy.
The Dow Jones industrials slipped 9.69 points to 12,973.26.
The Nasdaq composite index was 0.79 of a point lower to 2,962.96 and the S&P 500 index lost 0.77 of a point to 1,364.97.
The energy sector dropped 0.8 per cent as the April crude contract on the New York Mercantile Exchange fell $1.12 to $108.65 (U.S.) a barrel. That is still a long way from the $96 a barrel level where it started the month. Prices have surged primarily because of tensions with Iran over its nuclear program but also because of signs of stronger growth in the U.S.
But worries have grown that the surge in prices could jeopardize the U.S. economic recovery and hurt corporate earnings while deepening a recession in Europe.
On the TSX, Canadian Natural Resources (TSX:CNQ) gave back 37 cents to $37.63 (CAN) and Imperial Oil (TSX:IMO) fell 72 cents to $48.08.
The base metals sector lost 1.2 per cent, also down from early levels as copper prices made up early losses and were unchanged at $3.87 (U.S.) a pound. Prices rallied about four per cent last week, partly on signs that China could take further steps to loosen lending and encourage economic growth. China is the world's biggest consumer of the metal, which is known as an economic bellwether as it is used in so many different businesses. Teck Resources (TSX:TCK.B) dropped 47 cents to $40.19 (CAN).
Ivanhoe Mines chief executive Robert Friedland said Monday that potential buyers are sniffing around the company's assets. The company, which is developing the Oyu Tolgoi mine in Mongolia, said it has has received detailed, written expressions of interest on potential asset sales that "could realize significant capital to support the ongoing development of Oyu Tolgoi." Ivanhoe shares were off seven cents to $17.45.
Bullion prices also shed early losses, rising $2.40 to $1,778.80 (U.S.) an ounce and the gold sector turned slightly higher. Goldcorp Inc. (TSX:G) rose 23 cents to $48.87.
Most sectors were lower with financials down 0.5 per cent as most of the big Canadian banks deliver their latest quarterly earnings this week.
Bank of Montreal (TSX:BMO) is scheduled to post its earnings on Tuesday and its shares edged up three cents to $58.13. TD Bank (TSX:TD), Royal Bank (TSX:RY) and National Bank (TSX:NA) all report on Thursday.
National Bank shares were down 28 cents to $76.31 as it said it is selling asset management business Natcan Investment Management Inc. to Fiera Sceptre Inc. (TSX:FSZ) for $309.5-million. Fiera shares jumped $1.31 or 18.19 per cent, to $8.51
Buyers were also cautious after a meeting of G20 nations ended with the message that they won't provide additional funding for the International Monetary Fund until the European Union first increases its financial stabilization funds. The G20 countries would require the EU to add about $500-billion (CAN) in firewall funds before the rest of world considered contributing to the region's stabilization effort.
"They turned it back to Europe to say, effectively, get your own house in order and build a firewall and we don't need to support you right yet," added Aitken.
On the earnings front, Valeant Pharmaceuticals International Inc. (TSX:VRX) shares gained $1.44 to $49.45 as quarterly profit at the specialty pharmaceutical company rose on acquisitions and strength in its dermatology business. Valeant posted a profit of $55.9-million compared to a loss of $31.1-million a year earlier. Revenue grew by 34 per cent to $688.5-million.
Fiscal fourth-quarter net income at home improvement company Lowe's Cos. rose 13 per cent on an 11 per cent rise in revenue, helped by an extra week in the period compared with a year ago. The results beat Wall Street estimates and the home improvement company forecast fiscal 2012 revenue above Wall Street's expectations and its shares were ahead 29 cents to $27.45.
European markets were deep in the red as London's FTSE 100 index declined 0.63 per cent, Frankfurt's DAX lost 0.72 per cent and the Paris CAC 40 was down 0.95 per cent.
In Asia, Japan's Nikkei 225 index ended down 0.1 per cent, Hong Kong's Hang fell 0.8 per cent, South Korea's Kospi lost 1.4 per cent while Australia's S&P/ASX 200 dropped 0.9 per cent.
But mainland Chinese shares advanced. The benchmark Shanghai Composite Index added 0.3 per cent and the Shenzhen Composite Index gained 0.3 per cent.
Traders looked ahead for a series of key economic reports coming out this week, including the latest look at U.S. and Canadian fourth quarter economic growth.
Traders will also take in the latest reading on U.S. consumer confidence from the Conference Board on Tuesday while Institute for Supply Management releases its index on the U.S. manufacturing sector Thursday.