The Toronto market had enjoyed a solid advance in the wake of a strong U.S. jobs report released at the end of last week but the main index ended the session down 46.66 to 14,743.12 amid major corporate moves.
Shares in Quebecor (TSX:QBR.B) also erased early advances to decline 47 cents to $28.17 even as Desjardins Securities upgraded the stock to a "buy" with a price target of $29 following the company's deal to sell Sun Media Corp.'s English-language operations to Postmedia Network Canada Corp. (TSX:PNC.B) for $316 million. The agreement includes 175 newspapers and publications, including the Sun chain of daily newspapers. Postmedia shares jumped 25 cents to $2.50.
And in the tech sector, Hewlett-Packard is splitting itself into two companies. One will focus on its personal computer and printer business and another on technology services, such as data storage, servers and software. HP shares were up 4.75 per cent to US$36.87 in New York.
The Canadian dollar jumped 1.02 cents to 89.84 cents US, more than recovering Friday's steep loss of 3/4 of a cent as the greenback weakened from multi-year highs against major currencies.
U.S. markets also moved into the red ahead of earnings from big multinationals including resource giant Alcoa and food companies PepsiCo and Yum Brands.
The Dow Jones industrials dropped 17.78 points to 16,991.91, the Nasdaq lost 20.82 points to 4,454.8 and the S&P 500 index slipped 3.08 points to 1,964.82.
Traders were cautious amid expectations for a slowing pace in earnings growth and worries about the impact of a much stronger U.S. dollar.
"There’s no question that a higher U.S. dollar, in terms of reported earnings, will have meaningful impact," said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis, MI.
"Earnings will continue to go up, but not nearly at the pace we have seen over the past couple of years. So, to the extent that we see any disappointment in earnings, particularly from some of the big bellwether, multinational firms, I think that will serve as another catalyst for volatility."
The U.S. dollar has strengthened considerably during the last few weeks with the U.S. dollar index hitting a four-year high Friday. A major reason for the stronger greenback has been a euro which has slipped against a backdrop of practically non-existent inflation, poor economic data and a vow from the European Central Bank to get the eurozone out of a deep funk, such as driving interest rates to near zero.
Rail stocks helped push the industrials group down just over one per cent.
But Air Canada (TSX:AC.B) ran ahead 31 cents to C$8.18 as the carrier reported its flights had fewer empty seats last month. The airline reported a load factor of 84.7 per cent for September, up from 83.2 per cent a year ago. Air Canada also said it has reached a tentative agreement with the union representing its pilots for a new 10-year contract.
The energy sector shed 0.7 per cent while November crude in New York was up 60 cents to US$90.34 a barrel.
The TSX base metals component was off 0.1 per cent while December copper was four cents higher to US$3.04 a pound.
The battered gold sector was the leading TSX advancer, up about 0.9 per cent as December gold gained $14.40 to US$1,207.30 an ounce.