Stocks move lower as enthusiasm fades
Canadian stocks were lower near midday as enthusiastic gains last week led to some profit taking on Monday.The S&P/TSX composite index moved down 16.39 points to 12,483.08 while the TSX Venture Exchange was up 2.64 points to 1,320.75.The Canadian dollar backed off 0.05 of a cent to 102.92 cents US.On Wall Street, the Dow Jones Industrial Average was down 22.27 points to 13,571.10, the Nasdaq composite index backed off 8.02 points to 3,175.93, while the S&P 500 index slid 2.43 points to 1,463.34.“We’ve had such a big move in such a short period of time … so I’d say a little bit of profit taking is to be expected,” said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier. “If anything, it’s quite minor to me.”Traders backed away from some of their enthusiasm over the Federal Reserve’s plan for new measures to energize the U.S. economy, while attention turned to weakness in Asian markets, and a move from Hong Kong to tighten mortgage lending — an effort to help slow the rise of home prices.Sentiment on the Canadian housing market also pulled back as the Canadian Real Estate Association cut its forecast for home sales this year and next and lowered its national average price forecast, partly due to revised mortgage lending regulations implemented last month.In its outlook for the year, CREA said Monday that home sales are now forecast to rise by 1.9 per cent to 466,900 units in 2012, but slip by 1.9 per cent to 457,800 units in 2013.The national average home price is forecast to rise by just 0.6 per cent to $365,000 in 2012 and edge lower by one tenth of one per cent to $364,500 in 2013.Shares of Rona Inc. (TSX:RON) were down nearly eight per cent after Lowe Companies (NYSE:LOW) said it is no longer trying to buy the company. The controversial plan would have seen Canada’s largest home-improvement retail chain acquired for about $1.8 billion. Rona shares backed off $1.01 to $11.76.TSX information technology stocks were 1.2 per cent lower with Research In Motion (TSX:RIM) shares falling 3.3 per cent, or 24 cents, to $7.10.The decline came as Apple says iPhone 5 preorders topped 2 million in 24 hours, more than double the amount of iPhone 4S preorders.In commodities, the October crude contract on the New York Mercantile Exchange rose 23 cents to US$99.23.Copper prices for December were down 3.5 cents to US$3.80 a pound. Copper, viewed as an economic barometer because it is used in so many industries, surged 19 cents last week.Bullion was down 40 cents at US$1,772.30 an ounce.Global stock markets rallied late last week after the Fed announced it planned to buy US$40 billion of mortgage bonds a month for as long as necessary as part of a strategy known as quantitative easing aimed at encouraging people to borrow money and spend it. The Fed also extended its pledge to keep short-term interest rates low until 2015, a year longer than its previous target.