The Toronto stock market was sharply lower Tuesday as the latest read on U.S. factory orders disappointed while traders took in major deal-making in the brewing and banking businesses.
The S&P/TSX Composite Index fell 128.56 points, or 1%, to approach noon at 12,378.50
The Canadian dollar faded 0.06 cents to 100.89 cents U.S.
Molson Coors Brewing Company will pay $3.5 billion U.S. to acquire StarBev, giving the Canadian-American beer maker a new base in Europe and adding more than 20 brands to its portfolio.
StarBev, headquartered in the Czech Republic, had sales totalling about $1 billion U.S. last year and had $322 million in profit, after adjustments. Denver-based Molson Coors shares were down $1.47 to $44.19 U.S. in New York.
Royal Bank of Canada will pay $1.1 billion cash to buy the remaining half of RBC Dexia, an adviser to pension fund managers and institutional investors. The Canadian bank's partner, formerly called Dexia SA, had indicated months ago it would sell its half of the joint venture.
Meanwhile, RBC is fending off major allegations from a U.S. regulatory agency. The U.S. Commodity Futures Trading Commission accused RBC on Monday of hundreds of millions of dollars in sham trades.
Canada's biggest bank calls the allegation absurd, since it sought guidance from the CFTC before making the trades and acted within the agency's guidelines. Royal Bank shares were down $1.63 to $57.11, helping to send the financial sector down substantially.
Elsewhere in the sector, Scotiabank gave back gave back 57 cents to $55.58.
The Toronto stock market's solid runup Monday was triggered by a report that showed U.S. industrial production grew in March at a faster pace than expected while China said that manufacturers also gained momentum. However, manufacturing data from France and Germany weakened, suggesting Europe will likely face a recession this year.
However, the TSX has fallen for the past four weeks on concerns that the pace of the economic recovery is out of sync with the strong gains seen on stock markets since the beginning of October.
The energy sector was down as Canadian Natural Resources shed 47 cents to $33.28 while Suncor Energy declined 40 cents to $32.80.
The TSX base metals component was down with the May copper contract ahead one cent at $3.93 U.S. a pound after the Chinese data had helped send the metal up a dime on Monday. China is the world's biggest copper consumer. Ivanhoe Mines fell $1.24 to $14.36 and Inmet Mining dropped $2.07 to $55.65.
The gold sector backed away as Goldcorp Inc. faded 76 cents to $45.01.
Research In Motion was a major decliner, falling 81 cents, or 5.7%, to $13.44. The company said Tuesday that it will offer software to companies and governments that would open up its secure network for use on iPhones and other mobile devices in the workplace.
The TSX Venture Exchange slipped 16.54 points to 1,565.25, while the Nasdaq Canada index slid 6.25 points to 414.32
All but three of the 14 Toronto subgroups lost ground Tuesday morning. Metals and mining gave back 2.3%, while global base metals lost 1.8%, and gold slid 1.7%.
The three stalwarts proved to be health-care, 0.9% more hale, real-estate and telecoms being 0.1% higher each.
In New York, stocks moved down on Tuesday, as investors digested a mixed bag of economic reports.
The Dow Jones Industrials stumbled 64.96 points by noon hour to 13,199.50, after hitting heights the big board had not seen in more than four years on Monday.
The S&P 500 tailed off 5.66 points to 1,413.38, but the Nasdaq slipped 8.61 points to 3,111.09
Shares of Apple continue to hit new all-time highs, after several analysts raised their price targets on the stock, with one analyst predicting that shares, which recently cleared $600, could top $1,000 U.S.
Avon Products shares rose Tuesday, following on gains of more than 17% Monday, after the company rejected a $10-billion U.S. purchase offer from beauty company Coty Inc.
Auto sales will be in focus throughout the day. Chrysler Group said March was the best month for sales in four years. Investors will be also watching Ford and GM for indications about the health of the auto industry.
Daily deals site Groupon remains in the spotlight following a report in Tuesday's Wall Street Journal saying that the Securities and Exchange Commission is probing its revision of its first set of results as a publicly traded company.
Shares of retailer Urban Outfitters surged after the company gave upbeat guidance in a SEC filing.
On the economic slate, a report on factory orders for the month of February came in below expectations after the report said activity picked up by 1.3% compared to expectations of 1.4%.
Still, that represents an increase. January orders dropped by 1%.
On Tuesday afternoon, investors will get some insight into the Federal Reserve's policy-making crystal ball, when the central bank releases minutes from its most recent meeting.
The price on the benchmark 10-year U.S. Treasury gained, driving yields down to 2.16% from Monday's 2.19%. Treasury prices and yields move in opposite directions.
Oil for May delivery shed 56 cents to $104.67 U.S. a barrel.
Gold futures for April delivery fell $5.50 to $1,674.30 U.S. an ounce.