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At the open: Geopolitical worries weigh on stocks

An Israeli rocket is fired into the northern Gaza Strip. Israeli Prime Minister Benjamin Netanyahu on Thursday instructed the military to begin a ground offensive in Gaza, an official statement from his office said. The Israeli military says Gaza militants have fired more than 1,300 rockets into Israel. Palestinian health officials say 233 Palestinians have been killed in Israeli air and naval strikes. One Israeli civilian has been killed by fire from Gaza.

AMIR COHEN/REUTERS

The Toronto stock market was lower Monday with markets focused on tensions arising from Israel's ground offensive in Gaza and the aftermath of the shooting down of a Malaysian airliner over Ukraine on Friday.

The S&P/TSX composite index was down 25.45 points to 15,241.12.

The Canadian dollar was down 0.08 of a cent to 93.06 cents (U.S.).

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U.S. markets were lower as traders assessed the likelihood of Western countries imposing tougher sanctions against Russia over its support of Ukrainian rebels, who are suspected of shooting down the Malaysian Airlines jetliner with a surface-to-air missile.

"Tensions continue to rise as various groups try to determine responsibility for the shooting of (the airliner)," said BMO Capital Markets senior economist Jennifer Lee.

"But first, there must be an agreement on who is in charge and that, so far, is very much of a challenge," Lee said in a note to clients.

The Dow Jones industrials lost 82.33 points to 17,017.85, the Nasdaq fell 16.45 points to 4,415.7 and the S&P 500 index was 8.28 points lower to 1,969.94.

The disaster, in an area controlled by pro-Russian separatists, has sparked international condemnation and increased pressure on Russia to stop meddling in Ukraine. Russian officials have blamed Ukraine's government for creating the situation and atmosphere in which the plane was downed.

Meanwhile, Israeli Defence Minister Moshe Yaalon said Monday he is prepared to continue the offensive "as long as necessary" to halt rocket fire and other attacks from Gaza on Israelis.

Israel accepted an Egyptian call for an unconditional cease-fire last week, but resumed its offensive after Hamas rejected the proposal.

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Hamas says that before halting fire, it wants guarantees that Israel and Egypt will significantly ease a seven-year border blockade of Gaza.

The energy sector led TSX decliners, down 0.32 per cent while August crude on the New York Mercantile Exchange added 57 cents to $103.70 (U.S.) a barrel.

TSX losses were curbed by rising gold stocks as traders looking for safety pushed August gold up $6.60 to $1,316 an ounce.

The base metals component was up 0.22 per cent while September copper was up a penny at $3.20 a pound.

Corporate earnings are also a major focus for investors this week. In Canada, Canadian National Railways posts results after the close. Other big Canadian companies reporting this week include Husky Energy, Rogers Communications, Loblaw Co. Ltd. and Teck Resources on Thursday.

Investors were also looking ahead to U.S. earnings reports amid hopes American economic growth is recovering. Results from Apple, Microsoft and Coca Cola were due out Tuesday and Caterpillar on Thursday.

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On Monday, oilfield services company Halliburton Co. said that its second-quarter earnings rose 20 per cent to $774-million (U.S.), or 91 cents per share, from $644-million, or 69 cents per share, a year ago. The average per-share estimate of analysts surveyed by Zacks Investment Research was for a profit of 92 cents. Revenue climbed 10 per cent to $8.05-billion, beating Wall Street's forecast of $7.88-billion.

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