Source: The Canadian Press

The Toronto stock market closed little changed Monday, depressed by resource stocks amid worries about European government debt and a slowing Chinese economy.

The S&P/TSX composite index closed 13.83 points lower at 12,735.41 while the TSX Venture Exchange declined 25.05 points to 1,982.09.

The Canadian dollar rose 0.02 of a cent to 99.12 cents US after having lost almost a cent Friday as worries that China would take further steps to curb lending and slow its economy strengthened the U.S. dollar and sent commodity prices tumbling.

Those worries also helped push the TSX down 1.36% last week.

Toronto’s main board is still up about 8% year to date, but last week’s performance raised the possibility that a rally that started in late August may have run its course.

“I’m not sure there aren’t reasons to take (the rally) higher but I think that after a strong rally like we’ve seen there’s always a pullback as investors try to decide, has it gone too far or hasn’t it,” said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis, adding that last week’s pullback suggests a pause rather than a change in direction.

“What we’re seeing are better than expected economic indicators out of most countries around the world, but especially the U.S., and very strong third-quarter earnings in Canada and the U.S.”

The greenback strengthened against a variety of other currencies, including the euro, amid worries that Ireland will have to look for outside help to get a handle on its mounting debt. There was also a positive reading on U.S. retail sales.

Meanwhile, Potash Corp. of Saskatchewan shares (TSX:POT) were down $2.77 at $138.60 after Anglo-Australian mining giant BHP Billiton withdrew its hostile takeover bid for the fertilizer giant. BHP walked away less than two weeks after Ottawa rejected its US$38.6-billion offer as not being of net benefit to Canada. In New York, BHP Billiton’s shares rose about 0.8%.

Industrial stocks led advancers, up 1.23% with Canadian National Railways (TSX:CNR) ahead 74 cents at $64.87, while Bombardier Inc. (TSX:BBD.B) climbed 14 cents to $4.99.

The telecom sector rose 1% with Rogers Communications (TSX:RCI.B) ahead 59 cents at $37.16 while Telus Corp. (TSX:T) rose 49 cents to $45.06.

Financials rose 0.55% as Manulife Financial (TSX:MFC) was up 32 cents at $15.22 while Bank of Montreal (TSX:BMO) gained 48 cents to $58.70.

Oil prices were higher for most of the session after falling more than 3% on Friday after China said inflation rose to 4.4% in October, boosting concerns about what Beijing might do to slow economic growth, which would undermine demand for crude oil and other commodities.

Any moves to slow the Chinese economy have been negative for the Toronto market as heavy demand from China has helped raise prices for oil and metals and been a boon to commodity stocks generally.

But the energy sector lost 0.55% as the December crude contract on the New York Mercantile Exchange ended the session down two cents to US$84.86 a barrel. Imperial Oil (TSX:IMO) was down 43 cents at C$38.04 while Suncor Energy (TSX:SU) lost 51 cents to $34.42.

The base metals sector was down 0.78 even as the December copper contract on the Nymex was up three cents at US$3.92 a pound after falling more than 3% Friday. Quadra FNX Mining (TSX:QUX) was down 29 cents at C$13.67 and Lundin Mining (TSX:LUN) declined nine cents to $6.59.

The gold sector also fell back despite the December gold contract in New York rising $3 to US$1,368.50 an ounce. Goldcorp Inc. (TSX:G) faded 49 cents to C$46.36 while Barrick Gold Corp. (TSX:ABX) shed 64 cents to $50.61.

New York markets had chalked up solid gains for most of the session amid data from the U.S. Commerce Department that retail sales rose 1.2% last month. That was nearly double the gain that had been expected and the largest increase since March. Much of the strength came from a big rise in auto sales. Excluding autos, retail sales rose a more modest 0.4%.

But indexes closed little changed as U.S. Treasury prices fell sharply late in the session, which raised the yield on the securities, after a Moody’s Investors Service analyst said extending the Bush-era tax cuts would be bad for the U.S. credit rating.

The Dow Jones industrial average was up 9.39 points at 11,201.97.

The Nasdaq composite index declined 4.39 points to 2,513.82 while the S&P 500 index slipped 1.46 points to 1,197.75.

Investors kept a wary eye on Europe’s debt crisis amid reports that the Irish government is in talks with the European officials to discuss the country’s debt position.

Irish authorities say they have made no application to tap a financial support package implemented after the bailout of Greece in May. But many investors think the country will have no choice but to seek outside help, primarily because of the shaky state of its banks.

“Greece adopted a similar tactic right up until it formally asked for international assistance,” said Ben May, European economist at Capital Economics.

In other corporate news, Caterpillar Inc., the world’s largest construction and mining equipment maker, is buying Bucyrus International Inc. for US$7.6 billion in cash. Bucyrus makes surface mining equipment used for mining coal, copper, iron ore, oilsands and other minerals. Caterpillar shares gained 78 cents to US$81.82 in New York.

First Uranium shares plunged 14% to 98 cents Monday after the mining company reported a second-quarter loss of US$27.1 million, up 47% from a year ago due to foreign exchange and financing items.

Parkland Income Fund (TSX:PKI.UN) units dropped 8% to C$11.23. The Red Deer-based fund announced Friday that its third-quarter profit was down 96% from a year ago as a result of higher costs associated with its acquisition of Bluewave Energy.

Anvil Mining Ltd. (TSX:AVM) says it made $6.1 million in net income in the third quarter, or four cents per share, compared to a net loss of $200,000 for the third quarter of 2009. Net copper sales for the quarter totalled $14.9 million and copper production totalled 4,216 tonnes. Anvil shares added 11 cents to $5.13.