The Toronto stock market is in the red on the final day of January trading as worries about European deflation and emerging markets persuaded investors to step back after a big runup.
The S&P/TSX composite index dropped 64.58 points to 13,670.7.
The Canadian dollar advanced 0.18 of a cent to 89.74 cents (U.S.) as November gross domestic product rose 0.2 per cent, in line with forecasts.
New York's Dow industrials dropped 116.69 points to 15,731.92, the Nasdaq fell 19.85 points to 4,103.27 and the S&P 500 index lost 8.87 points to 1,785.32.
Data showed that inflation in the euro zone fell to 0.7 per cent in the year to January from 0.8 per cent the previous month.
The data raised worries that the region could slip into a situation where prices are actually falling. Such deflation can hurt an economy as consumers delay purchases and businesses postpone investment.
The deflation concerns added to emerging market currency worries that have buffeted markets this past week.
The TSX is up slightly for the month and the Dow industrials are down about five per cent. But analysts suggested that a reason for the decline is that investors simply wanted to cash in on a huge rally last year that left the Dow up well over 20 per cent.
"This is more like taking profits," said Sid Mokhtari, a technical analyst at CIBC World Markets, noting that the U.S. market has only fallen four per cent this month peak to trough.
"Internals of the market are still OK, we don't see too many damaged profiles to the market internals, which is generally a good sign."
Meanwhile, CNN reported that an environmental impact study into TransCanada's Keystone XL pipeline project is likely to be announced later in the day. A final decision by President Barack Obama may not come for several months, but this study is seen as a critical step in determining whether the controversial project will go ahead. TransCanada shares were up 31 cents to $48.14.
TSX losses were paced by a 1.5 per cent fall in the base metals sector as March copper in New York lost two cents to $3.20 (U.S.) a pound.
Uranium miner Cameco is selling its share of the Bruce Power nuclear partnership in southwestern Ontario to Borealis Infrastructure for $450-million. Cameco shares were down 70 cents to $23.88.
The industrials group fell 0.67 per cent after Canadian National Railway missing quarterly earnings estimates by a penny a share as results were impacted by tough winter conditions. CN also raised its quarterly dividend by 16 per cent to 25 cents but its shares fell 37 cents to $58.97 as RBC Capital Markets raised its rating on CN stock to outperform.
CN also said that 3,000 unionized train conductors, trainpersons, yardpersons and traffic co-ordinators failed to ratify a tentative contract that was reached in October.
Financials also weighed, down one per cent.
The gold sector slipped 0.5 per cent as gold faded 80 cents to $1,241.70 (U.S.) an ounce.
The energy sector rose 0.2 per cent as March crude fell 34 cents to $97.89 (U.S.).
In the U.S., Amazon stock fell nine per cent as the retailer handed in results that missed earnings and revenue forecasts.