TORONTO _ The Toronto stock market pulled back Thursday as worries grew about economic stability in Europe after one of Portugal's largest financial groups said it was investigating massive accounting irregularities.
The S&P/TSX composite index was down 57.09 points at 15,158.10 after having opened 100 points lower before clawing back a big chunk of the losses. Energy stocks were a major weight, but somewhat offset by a surge in gold.
The Canadian dollar was up 0.05 of a cent to 93.86 cents US.
The Lisbon stock exchange was down sharply as the Espirito Santo group of companies, which includes Portugal's largest bank, said it was looking into major accounting issues. The news rattled investors in Portugal, which was one of the major casualties of the eurozone debt crisis and only emerged from a three-year international bailout program in May.
``What it generally indicates is that we're not entirely out of the woods yet in Europe,'' said Tim Caulfield, co-lead manager at Franklin Bissett Canadian Equity Fund in Calgary.
Concerns over Portugal also put pressure on Wall Street. The Dow Jones industrials was down 46.14 points to 16,939.47, while the Nasdaq lost 8.14 points to 4,410.89 and the S&P 500 dropped 4.8 points to 1,968.03.
With the uncertainty of the equity markets, traders flocked to the safe haven of gold, with the price of August bullion jumping $15.20 to US$1,339.50 an ounce. The gold sector was also the largest advancer on the Toronto Stock Exchange, up 2.32 per cent.
``What we're seeing is a natural flight to safety,'' said Caulfield. ``Gold itself is a go-to commodity in this type of environment.''
Meanwhile, the August crude contract on the New York Mercantile Exchange climbed 36 cents to US$102.65 a barrel, while September copper was ahead two cents at US$3.26 a pound.
Company earnings are expected to be the biggest driver in markets over the coming weeks as investors look for signs that the strengthening in both the Canadian and U.S. economies has translated into higher sales and profits. Many Canadian companies will be reporting quarterly earnings this month and into August.
Corus Entertainment (TSX:CJR.B) reported a third-quarter net loss of $30.3 million or 36 cents per share compared with a net profit of $89.9 million or $1.07 per share in the same quarter last year. Revenues were up 14 per cent to $214 million compared with $187.1 million year-over-year. Adjusted net income was $41.6 million or 49 cents per share, missing analysts estimates of $43.17 million or 51 cents and its stock fell nearly five per cent, or $1.13, to $24.22.
Postmedia Network Canada Corp. (TSX:PNC.B) said it managed to cut its losses for the third quarter, but still faced a steep drop in advertising revenue. The owner of several newspapers and websites, including the National Post, Vancouver Sun and the Ottawa Citizen, says it lost $20.6 million or 51 cents per diluted share for the three months ended May 31. That compared with a loss of $103.3 million or $2.56 per diluted share a year earlier when it booked an impairment charge of $93.9 million.
Postmedia is in the middle of a three-year turnaround plan, which has included closing various printing plants, laying off staff and setting up digital paywalls for its websites.
In other media news, Bell Media, which is owned by BCE Inc. (TSX:BCE), announced it was cutting 91 employees as it makes big changes to programming at music channels Much, MTV and M3. Shares in BCE were up nine cents at $48.37.
Also, Star Media Group said three of its free Metro daily newspapers _ in London, Ont., and Regina and Saskatoon _ will print for the last time on Friday. The decision will result in layoffs for 25 staff, and will allow the company to focus on larger markets, said Star Media, a division of Torstar Corp. (TSX:TS.B). Torstar shares were unchanged at $8.23.
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