Stocks decline amid mixed data

The Toronto stock market was lower Monday as weak U.S. economic data and worries about going over the “fiscal cliff” overshadowed news that China’s manufacturing sector is finally back in expansion mode.The S&P/TSX composite index lost 27.98 points to 12,211.38 and the TSX Venture Exchange lost 7.26 points to 1,213.64.Markets had started the session in a more positive mood after HSBC’s Purchasing Managers’ Index for the world’s second-biggest economy rose to 50.5 in November from October’s 49.5. Any reading above 50 indicates activity is expanding. It was the first time in 13 months that China’s manufacturing sector emerged from contraction.Growth in China is particularly welcome since so many other countries are faltering to one degree or another. China is just starting to revive after the government took steps to slow the economy in order to reduce high inflation.But signs emerged that uncertainty over whether the U.S. can avoid a major fiscal crisis could be already affecting the U.S. economy as the Institute for Supply Management index for November came in at 49.5, the lowest level since July 2009 and down from 51.7 in October.“I think there is no doubt there is some concern and anxiety,” said Fred Ketchen, manager of equity trading at Scotia Capital. “What you’re playing with is confidence. You have this push-pull situation with confidence (and) confidence for those who have it is more hopeful than real I think at the present time.”The Canadian dollar was down 0.08 of a cent to 100.56 cents US.U.S. indexes also weakened after the mid-morning ISM report as the Dow Jones industrials lost 27.53 points to 12,998.05, the Nasdaq composite index rose 2.6 points to 3,012.84, and the S&P 500 index was off 0.74 of a point to 1,415.44.Traders were not inclined to make big bets as the end-of-year deadline approaches for averting the “fiscal cliff,” a combination of tax increases and across-the-board spending cuts set to automatically take place at the first of the year if there’s no compromise agreement.The shock of seeing the drastic fiscal measures go into effect in January would cut economic growth and likely push the U.S. back into recession.Obama proposes US$1.6 trillion in higher taxes over a decade and heightened presidential power to raise the U.S. government’s debt limit. In exchange, Obama proposes $600 billion in spending cuts, including some to Medicare. He also wants $200 billion in new spending to support economic recovery.House Speaker John Boehner, a key Republican in the U.S. Congress, says Obama’s plan isn’t serious. He says Republicans have plenty of ideas, but he’s not giving specifics.The gold sector led decliners, down about one per cent while bullion gained $5.40 to US$1,718.10 an ounce. Goldcorp Inc. (TSX:G) faded 78 cents to C$37.93.Techs were weak with Research in Motion Ltd. (TSX:RIM) down 13 cents to $11.46 as its stock was downgraded to sell from hold at Canaccord. The firm cited RIM’s recent share strength and doubts that the new BB10 lineup, which is being launched at the end of January, can turn its long-term business trends.The financials group shed 0.27 per cent as Scotiabank (TSX:BNS) gave back 29 cents to $55.71.The industrials sector was off 0.4 per cent as Canadian Pacific Railway Ltd. (TSX:CP) set aside plans to build a 420-kilometre extension to serve coal mines in the Powder River Basin, which underlies parts of Montana and Wyoming. CP will take a $180-million non-cash charge on its books as a result of a decision to defer the plan indefinitely because of a deterioration in the market for thermal coal, which is primarily burned to produce power. Its shares were down $1.32 to $91.38.Gainers were led by a 0.55 per cent climb in the consumer staples sector. Dairy and grocery products company Saputo (TSX:SAP) is making a major acquisition. The Montreal-based company is paying $1.45 billion to buy Morningstar Foods, a 2,000-employee company that makes dairy and non-dairy products for the U.S. market.Saputo has said it plans to expand in the United States but has downplayed speculation it might acquire Hostess, the bankrupt company that makes Twinkies snack cakes. Saputo shares gained $1.40 or three per cent to $47.44.The base metals sector gained 0.5 per cent even as copper prices failed to find lift from the Chinese data with the March contract unchanged at US$3.65 a pound. China is the world’s biggest consumer of the metal, which is viewed as a proxy for the global economy as it is used in so many applications. Taseko Mines (TSX:TCO) climbed three cents to C$2.81.The energy sector was flat while the January crude contract on the New York Mercantile Exchange up 68 cents to US$89.59 a barrel.Husky Energy Inc. (TSX:HSE) added six cents to C$27.94 as it said it has set a 2013 capital budget of $4.8 billion, a modest increase from the $4.7 billion it expects to spend this year. The energy company also aims to substantially increase production in the coming years.In other corporate news, automakers are reporting sales figures for November. Chrysler was first out of the gate Monday, announcing its U.S. sales rose 14 per cent last month, making it the best November since 2007. Chrysler says its sales were led by the Dodge brand with sales up 32 per cent over November of last year.Chrysler Canada reported Monday its sales in November totalled 17,013, up five per cent from November 2011, boosted by improved car sales. Ford says U.S. sales rose 6.5 per cent in November thanks to strong demand for its F-Series pickups and the company’s new C-Max hybrid. General Motors’ U.S. sales rose just three per cent from a year earlier.European bourses turned mixed as London’s FTSE 100 index dipped 0.07 per cent while Frankfurt’s DAX and the Paris CAC 40 climbed 0.35 per cent.

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