Source: The Canadian Press

The Toronto stock market closed lower Monday as ongoing uncertainty about the strength of the global recovery affected both commodities and mining stocks.

The S&P/TSX composite index was down 26.18 points to 11,543.47. Earlier in the day, the index briefly lost more than 100 points.

The gold sector was the biggest loser, falling 1.8% as the August bullion contract fell $6.30 to US$1,181.90 an ounce. Shares in Goldcorp Inc. (TSX:G) lost 49 cents to C$41.95.

The TSX base metals sector fell 0.4% as the September copper contract on the Nymex gained 0.85 cent to US$2.94 a pound. Shares in Teck Resources Ltd. (TSX:TCK.B) lost 35 cents to C$33.09.

Weaker growth expectations in China and the United States, combined with the continued sluggish recovery in debt-plagued Europe, have dampened the prices of many metals used to fuel growth in the global economy.

Meanwhile, financials fell 0.9% ahead of an expected interest rate hike by the Bank of Canada on Tuesday. Markets are expecting a rate increase of a quarter percentage point to 0.75%, but an indication that rates will continue to rise could weigh on stocks. Shares in CIBC (TSX:CM) lost 72 cents to $68.75.

The loonie slipped 0.02 cent to 94.8 cents U.S. If the central bank raises its key lending rate as expected, it’s likely to send the loonie higher as Canada becomes one of only a few developed countries in the world to hike rates.

ScotiaMcLeod investment adviser Andrew Pyle said the loonie has been moving in tandem with the U.S. dollar lately, but this could change if the Bank of Canada raises rates while the U.S. Fed stays put.

“If the market begins to feel that the bank will continue to push rates higher, then I think you may see some of that ‘Sell North America’ mentality fade,” he said.

The energy sector gained 0.5% as the August crude contract on the New York Mercantile Exchange gained 53 cents to US$76.54 a barrel. The September contract added 52 cents to $76.90. Shares in Suncor Energy Inc. (TSX:SU) were up 22 cents to C$32.55.

The TSX Venture Exchange lost 17.28 points to 1,362.19.

The drop Monday followed a rout of all major U.S. indexes last week, when some abysmal economic data and disappointing earnings from key U.S. companies heightened concerns that the global economic recovery is stalling.

“We didn’t see the extended losses (in Toronto) that we saw on the major U.S. indexes or the European indexes, so there was probably some catch-up selling on the TSX (Monday),” said Pyle, based in Peterborough, Ont.

On Wall Street, investors looked to earnings from some major U.S. companies for direction.

Halliburton (NYSE:HAL), toy-maker Hasbro (NYSE:HAS) and Delta Air Lines (NYSE:DAL) all beat analysts’ expectations based on earnings per share, sending markets higher.

The Dow Jones industrial average added 56.53 points to 10,154.43. The Nasdaq composite index gained 19.18 points at 2,198.23 while the S&P 500 index was up 6.37 points to 1,071.25.

In corporate news Monday, Nokia Siemens Networks said it will acquire the majority of Motorola’s (NYSE:MOT) wireless operations for US$1.2 billion in a major thrust to gain a stronger foothold worldwide.

In Canada, Tomkins PLC said private equity firm Onex Corp. (TSX:OCX) and the Canada Pension Plan Investment Board bid 2.87 billion pounds (US$4.37 billion) to acquire the British engineering and manufacturing company. Shares in Onex gained seven cents to $25.14.

Qatar Airways has ordered three business jets from Canadian manufacturer Bombardier Inc. (TSX:BBD.B) in a deal worth US$122 million at list prices, but the airline said it has not yet been able to conclude a deal to buy Bombardier’s CSeries commercial jet. Bombardier shares lost 31 cents or 6.5% to $4.43.

Heroux-Devtek Inc. (TSX:HRX) said it has received two new multi-year contracts worth more than $35 million from Triumph Aerostructures. Shares in the Montreal-based aircraft parts maker added 16 cents or 2.9% to $5.65.

Uranium company Khan Resources Inc. (TSX:KRI) said it has won a round in its legal battle with Mongolia’s nuclear energy agency after an administrative court ruled that the government agency had no legal authority to invalidate a mineral licence held by Khan’s subsidiary. Shares in Khan jumped 20.5 cents or nearly 90% to 43.5 cents.

And Ivanhoe Mines Ltd. (TSX:IVN) said it has added three more lenders, including Export Development Canada, to a group arranging a debt financing package for a huge copper and gold project in Mongolia. Shares in Ivanhoe added 28 cents to $17.40.