TORONTO - The Toronto Stock market looked to start off lower on Monday as turmoil in Iraq pushed oil to just past US$107 a barrel and traders looked ahead to the U.S. Federal Reserve's monthly policy meeting later in the week.
The Canadian dollar was down 0.21 of a cent to 91.9 cents US ahead of Wednesday's Federal Reserve meeting to see if the U.S. central bank makes any changes to its massive bond purchase program that has supported markets in the world's biggest economy.
U.S. futures were negative with the Dow Jones industrial futures down 45 points to 16,775.74, the Nasdaq futures declined 9.5 points to 3,775.56, while the S&P 500 futures dropped 4.75 points to 1,936.16.
At one point, the benchmark U.S. crude for July delivery rose 36 cents to $107.27 — the highest in nine months — in electronic trading on the New York Mercantile Exchange, but it fell back to US$107.05.
Violence worsened in Iraq with reports of a massacre by Islamic militants, raising fears of widening instability in the country, a key energy producer.
The northern town of Tal Afar became the latest to fall to the militants, who have already captured a vast swath of territory including Iraq's second-largest city, Mosul. The militants, who on Sunday posted graphic photos of truckloads of Iraqi soldiers that they apparently captured and killed, vow to march on Baghdad.
World stock markets mostly declined Monday as the turmoil in Iraq dampened sentiment and investors held back ahead of the Federal Reserve's meeting.
In corporate news, U.S. medical device manufacturer Medtronic announced late Sunday that it has agreed to buy Ireland-based competitor Covidien for $42.9 billion in cash and stock. The combined company would have its executive offices in Dublin, where it could benefit from Ireland's lower corporate tax rates. But the merged company would continue to operate in Minneapolis, where Medtronic employs more than 8,000, the companies said in a statement.
In Canada, Dorel Industries Inc. (TSX: DII.B) says it's buying Hong-Kong-based Lerado Group, one of the largest manufacturers of infant and juvenile products in China, for US$120 million. The purchase will provide Dorel with its first company-owned factories in Asia. The acquisition includes four plants, three in China and one based in Taiwan.
Sears Canada (TSX:SCC) says it has an agreement to develop its property at the North Hill Shopping Centre in Calgary with the Concord Pacific Group of Companies. The development of its almost five-hectare site would include residential high-rises with the potential for some retail sites, while Sears says it will continue to operate its store at the North Hill Shopping Centre. The agreement would see the sale of a 50 per cent interest in the site to Concord for a value of about $15 million, and Concord would manage most of the development.
Aveda Transportation and Energy Services says it's buying the U.S.-based rig moving assets of Precision Drilling Corp. for US$24 million. Aveda (TSXV:AVE) says the deal, expected to close of July 1, adds to its U.S. assets. The company is acquiring rig moving equipment, trucks, trailers, loaders and cranes from Calgary-based Precision Drilling (TSX:PD).
On the commodity markets, the July crude contract on the New York Mercantile Exchange gained 14 cents to US$107.05 a barrel.
August bullion was up $8.30 to US$1,282.4 an ounce and July copper was up two cents to US$3.05 a pound.