3 Min Read
TORONTO, Feb 11 (Reuters) - Toronto stocks turned weaker at midmorning on Monday as more worries about the health of the global economy and declining commodity prices overshadowed a report that Nortel Networks NT.TO will team up with Motorola Inc MOT.N in wireless networking.
By midmorning, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 26.50 points, or 0.2 percent, at 12,962.84.
Earlier in the session, the index had climbed as high as 13,069.39.
"We're trying to come to grips with the volatility that we've experienced over the last couple of weeks. We had the best week in years followed by the worst week in years," said Rick Hutcheon, president and chief investment officer at RKH Investments.
"We're still in this faithful no-man's land, where the market doesn't have a trend."
Investors keyed on developments at the Group of Seven meetings over the weekend, where leaders expressed concern that the troubled U.S. housing market had hurt the world economy.
Exacerbating the problem was insurer American International Group Inc (AIG.N), which received a rebuke from its auditors for how it valued some credit derivatives.
Seven of the TSX index's 10 main groups were lower, led down by a 0.7 percent drop in the heavily weighted financial index and a 0.7 percent drop in the resource-heavy materials group.
A 0.9 percent rise among technology shares softened the blow.
Financial shares followed AIG lower with Canadian insurer Manulife Financial MFC.TO off 35 Canadian cents at C$36.12, and Royal Bank of Canada (RY.TO) down 24 Canadian cents at C$50.32.
Materials shares weakened as prices for key commodities, including gold, backed off session highs amid profit-taking.
Barrick Gold (ABX.TO), the biggest producer in the world, fell 45 Canadian cents to C$49.39, and base metals giant Teck Cominco TCKb.TO fell 33 Canadian cents to C$34.40.
Firm technology shares helped temper some of the losses with Nortel Networks gaining 11 Canadian cents to C$11.13, and Research In Motion RIM.TO adding C$1.93 to C$91.82.
The Wall Street Journal reported that Motorola and Nortel are in talks to combine their wireless infrastructure units. The talks could create a joint venture with sales of around $10 billion, combining businesses that make network equipment for wireless phone carriers, the Journal said.
Nortel would not comment on the report. ($1=$1.00 Canadian) (Reporting by Scott Anderson; Editing by Peter Galloway)