Markets: News  

Canada stocks fall as RIM hits lowest since 2003

SAN FRANCISCO (MarketWatch) -- Toronto's benchmark equities index weakened Monday, shedding almost 1%, but a weather forecast managed to drive agriculture stocks higher.

The S&P/TSX Composite Index ($ISPTX) gave up 105.15 points to finish at 11,330.39. Dragging down the broader market was a 2.84% drop in the metals and mining sector (TTMN) , and faring even worse, the information technology (TTTK) slid 3.32%.

"The Canadian market is feeling the pain from low oil prices, deteriorating economic conditions from China, Europe and North America. With the market's heavy exposure to commodities these headwinds from the major economies are weighing on investor sentiment and prices," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier Inc.

Shares of Ithaca Energy Inc. (IAE) tumbled 14.75%, slumping after the oil and gas producer announced that within its Athena field operations just three of four production wells were running. The company also pegged second-quarter net oil export production at 370,888 barrels.

Other notable movers were Satori Resources Inc. (BUD) , tumbling 11.11%, as well as Second Wave Petroleum(SCS) , trading down 6%, and Uranium One(UUU) , sliding 6.92%.

With crude oil trading below $80 a barrel in the past few sessions, analysts will need to trim earning outlooks for oil companies, said Nakamoto.

Oil futures for delivery in July slipped further Monday, ending the session to trade down 0.7% at $79.21 a barrel on the New York Mercantile exchange. Read more about oil.

"Until either central bankers and/or political leaders, European ones in particular, show some resolve to stimulate the economy, the outlook continues to be cloudy," said Nakamoto.

"The easiest thing for investors to do is sell and wait on the sidelines, despite share prices selling at relatively low valuation levels," he added.

Tech shares were also in the red Monday, with Research In Motion Ltd. (RIM) (RIMM) hitting its lowest level since 2003, finishing the session to trade down at C$9.36. The Blackberry maker's losses followed a Morgan Stanley downgrade to underweight, or sell, in which its target price was set at US$7, or C$7.21 at current exchange rates.

Morgan Stanley analysts said that they "believe the next 6 to 9 months are likely filled with the competing factors of rapidly deteriorating fundamentals on the one hand and stories of potential strategic options on the other, leaving the stock pushed and pulled strongly in both directions."

RIM is expected to post its first-quarter results this Thursday.

Electronics manufacturer Celestica Inc. (CLS) also took a hit, falling 3.63%. The stock struggled despite receiving recognition Monday by Ciena with the Product Quality and Service Supplier of the Year Award.

Read more about RIM and tech stocks.

On the upside were several gold stocks, helping lift the materials sector (TTMT) higher. Centerra Gold(CG) added 3.21% and Goldcorp Inc. (G) (GG) gained 3.19%. Meanwhile, Canada Gold Corp. (CI) lost 12.5%.

Gold futures settled higher 1.4% at $1,588.40 an ounce on the Comex division of the New York Mercantile Exchange.

Shares of Potash Corp. of Saskatchewan (POT) , the world's largest fertilizer maker, rose 2.08% after an analyst at Dahlman Rose & Co. upgraded the stock from sell to buy. Dahlman Rose also upgraded its rating for CF Industries (CF) , which subsequently gained 3.36%.

Buoying Potash and other agriculture stocks was a hot weather forecast and concerns for global supplies, driving corn futures (CZ2) upward 5.82%.

In currency trading Monday, Canada's dollar (USDCAD) fell 0.27%, with one greenback buying C$1.0292 vs. C$1.0263 Friday.