The S&P/TSX composite index ended trading off the worst levels of the session, down 10.58 points to 11,860.66 as advances in telecoms and utilities helped the index back from an earlier 85-point deficit. Losses were led by commodity stocks, which were particularly hard hit because of worries about worsening economic conditions in Europe and the U.S.
The TSX Venture Exchange slipped 7.63 points to 1,397.42.
The Canadian dollar had been negative early in the session as traders had avoided riskier assets like commodity-based currencies. But the currency closed up 0.25 of a cent to 100.7 as copper prices recovered some of the sharp declines of last week.
U.S. markets were also well off early lows with the Dow Jones industrials down 29.74 points to 13,008.53.
The Nasdaq composite index gained 1.42 points to 2,957.76 and the S&P 500 index rose 0.48 of a point to 1,369.58.
Final results showed socialist leader Francois Hollande narrowly defeated incumbent Nicholas Sarkozy with 51.62 per cent of the vote, ending 17 years of right wing government in France. Hollande campaigned on the need for more growth-generating economic policies and less reliance on austerity.
Many believe the austerity programs are necessary to keep bond investors from panicking about the possibility that more European nations will default or require bailouts.
But investors were particularly worried by the election in Greece, which resulted in a split Parliament with no party likely to be able to form a government. The two parties that governed as a coalition for the past six months and pushed through tough austerity measures to secure crucial bailouts were pummelled to the benefit of more extreme parties of the right and left.
The socialist Pasok party suffered the biggest retreat. Its share of the vote collapsed from around 43 per cent in the last election in 2009 to a little over 13 per cent.
"The lack of a coalition between Greece’s Pasok and New Democracy creates the unanswerable question of 'What happens next?,'" observed BMO Capital Markets senior economist Jennifer Lee.
"Both pro-austerity parties only won 32 per cent of the ballots so (they) need to woo the other parties to have a coalition, but that’s not going to be easy."
A period of uncertainty looms for the bailed-out country, which is in its fifth year of recession and has over half its youth out of work following big spending cuts and tax increases in return for crucial international bailout funds.
Mining and energy companies led declines after crude lost more than seven per cent and copper almost three per cent last week amid worries about slowing economic conditions.
Demand concerns continued to pressure oil with the June contract on the New York Mercantile Exchange down 55 cents to US$97.94 a barrel. The energy sector lost 0.42 per cent and Canadian Oil Sands (TSX:COS) declined 31 cents to $21.61 and Nexen Inc. (TSX:NXY) fell 52 cents to $17.26.
The base metals sector declined almost three per cent as copper gained five cents to US$3.77 a pound. Mercator Minerals (TSX:ML) lost 11 cents to 91 cents and Thompson Creek Minerals (TSX:TCM) was down 90 cents or 16.3 per cent to $4.61.
The gold sector surrendered early gains to lose 1.45 per cent while bullion moved down $6.10 to US$1,639.10 an ounce. IamGold Corp. (TSX:IMG) faded 31 cents to $11.16 while Goldcorp Inc. (TSX:G) lost 50 cents to $35.93.
The tech sector was also a drag with declines led by Research In Motion Ltd. (TSX:RIM), down another 21 cents to $11.75. The loss follows a plunge of almost 14 per cent last week despite having revealed an early version of its new BlackBerry 10 operating system.
Telecoms and utilities were positive by mid-afternoon with BCE Inc. (TSX:BCE) ahead 46 cents to $40.88 while TransAlta (TSX:TA) added 21 cents to $16.63. Banks also lent support with Scotiabank (TSX:BNS) up 81 cents to $53.59.
The TSX tumbled three per cent last week amid soft manufacturing data from China and a disappointing employment report Friday from the U.S. Worries about a deepening economic malaise in Europe has been further bad news for a resource intensive market like the TSX.
"The European economy is the biggest in the world when you put all those countries together," said Gareth Watson, vice president at GMP Richardson Limited.
"And if they are basically now in recession, you have the trifecta working against you in a commodity-based market."
The earnings calendar was light Monday with Cargojet Inc. (TSX:CJT) reporting that net income dropped to $30,000 or nil per share in the three months ended March 31. That compares to $1.3 million or 16 cents per share a year ago. Revenues weakened to $40.1 million from $41.1 million in the comparable period first-quarter results were affected by a continuation of declining volumes in its key overnight cargo services. Its shares slipped 15 cents to $8.
The earnings pace picks up later in the week when food company Loblaw (TSX:L) and its majority share owner George Weston (TSX:WN) reports on Tuesday, home improvement retailer Rona (TSX:RON), HudBay Minerals (TSX:HBM) pipeline company Enbridge (TSX:ENB) and Tim Hortons (TSX:THI) hand in earnings on Wednesday. Ahead of the report, Tim Hortons shares closed up 75 cents to $57.91, its highest price ever. Tim Hortons stock has surged 17 per cent this year. And insurer Sun Life Financial (TSX:SU) and Canadian Tire (TSX:CTC.A) report earnings on Thursday.