Source: The Canadian Press

Commodity stocks pushed the Toronto stock market lower Monday as gold, copper and oil prices gave up some of last week’s strong gains amid a disappointing reading of U.S. factory orders and nervousness ahead of the start of the quarterly earnings season.

The S&P/TSX composite index fell 40.14 points to 12,322.94 while the TSX Venture Exchange declined 5.23 points to 1,739.56.

The Canadian dollar slipped 0.14 of a cent to 97.85 cents US.

The base metals sector led decliners, down 1.73% as the December copper contract on the New York Mercantile Exchange moved three cents lower to US$3.66 a pound, after rising to a two-year high Friday in the wake of strong Chinese manufacturing data. Teck Resources (TSX:TCK.B) dropped $1.01 to C$42.34 while Equinox Minerals (TSX:EQN) declined 22 cents to C$5.84.

The energy sector was down 0.58% as oil prices faltered, after running ahead 7% over the previous three sessions on signs of strong Chinese growth and falling U.S. inventories.

The November crude contract in New York eased 11 cents to US$81.47 a barrel and Canadian Natural Resources (TSX:CNQ) declined 40 cents to C$36.37 while Cenovus Energy (TSX:CVE) gave back 24 cents to C$30.06.

The gold sector also stepped back as the December bullion contract on the Nymex lost $1 from Friday’s latest record high to close at US$1,316.80 an ounce. Barrick Gold (TSX:ABX) faded 85 cents to C$47.09 and Goldcorp Inc. (TSX:G) declined 57 cents to C$43.98.

The telecom sector was the prime advancer, up 1.43% as Rogers Communications (TSX:RCI.B) rose 74 cents to $38.80.

Nervousness about earnings rose after Deutsche Bank AG put Alcoa Inc. on its short-term “sell” list. The aluminum giant is to kick off the third-quarter earnings season in the U.S. after the close on Thursday. In New York, Alcoa shares fell 31 cents to US$11.92.

“Whether it will be a good October or a bad October will really be dictated by the earnings and what companies are saying in terms of going forward far more than anything we will get today and tomorrow,” said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis.

“The piece of good news on this is that most companies have not pre-announced.”

Meanwhile, U.S. factory orders fell 0.5% in August largely because of plummeting aircraft orders. That was slightly above expectations but, excluding the volatile aircraft sector, orders rose a solid 0.9%.

Employment data for the U.S. and Canada, which come out on Friday, are the most anticipated economic data of the week.

U.S. expectations are modest with economists predicting that only 5,000 jobs were created in September, with the jobless rate edging up a tenth of a point to 9.7%.

In Canada, economists forecast the economy created about 10,000 jobs last month.

New York’s Dow Jones industrial average closed down 78.41 points at 10,751.27.

The Nasdaq composite index shed 26.23 points to 2,344.52 while the S&P 500 index dipped 9.21 points to 1,137.03.

In corporate news, a report commissioned by the Saskatchewan government said that a successful takeover of PotashCorp (TSX:POT) could slash the province’s revenues by at least $2 billion over the next decade while having little or no net effect on employment. The Conference Board of Canada report seemed to indicate that there will be little short-term benefit to Canada if international mining giant BHP Billiton is successful in its hostile US$38.6-billion bid for PotashCorp. PotashCorp shares rose $2.70 to $147.70 in Toronto.

Shares in Great West Lifeco (TSX:GWO) were off 37 cents at $24.89 after a judge ruled Friday that the insurer breached sections of the Insurance Companies Act by transferring money from the accounts of two subsidiaries to finance the 1997 takeover of London Insurance Group. The move prompted 1.8 million policy holders to join a class-action suit that has been making its way through the courts over the last 12 years.

Great-West was ordered to pay $372 million to policyholders of London Life and $84 million to those of Great West Life.

The U.S. Supreme Court rejected an appeal that sought to hold the Canadian energy company Talisman Energy (TSX:TLM)accountable in U.S. courts for allegedly aiding genocide in its pursuit of oil in Sudan. The Presbyterian Church of Sudan had filed a civil lawsuit against Talisman on behalf of current and former residents of southern Sudan who suffered injuries during six years of a decades-long conflict in the region. Still Talisman shares dipped seven cents to $17.70 amid Monday’s general retreat in the energy sector.

Some 30,000 workers at supermarkets under various banners operated by Loblaw Companies Ltd. (TSX:L) in Ontario are voting on a tentative contract. Results are expected by Wednesday and Loblaw shares rose 91 cents to $41.53.

Toronto Stock Exchange operator TMX Group Inc. (TSX:X) said Monday it wants to create a new alternative trading system that will operate on its Quantum trading platform.

TMX Select, a wholly-owned subsidiary of TMX Group, will offer a visible marketplace for trading equity securities. It will include expanded trading hours, a simplified market structure with continuous trading of board lots only and strict price-time priority for visible orders. TMX Group shares declined 13 cents to $31.46.