Economic worries drive down TSX

Bay Street stocks climbed off the lows of the day but finished lower for a sixth time in seven sessions. The main index posted its lowest close in two months.

Minutes from the close, the S&P/TSX composite index was off 48.85 points to 10,861.90.

Tech stocks fell, as Research in Motion dropped 5.75% after the Blackberry-maker's stock was downgraded to "sell" from "buy" at Citigroup.

In other corporate news, UTS Energy Corp. gained nearly 3% after the company agreed to sell 50% of its interest in Alberta oil sands to Exxon Mobil for $250 million.

The Canadian dollar gained 0.61 cents to 92.81 cents U.S.

ON BAYSTREET

Of the 14 TSX subgroups, nine ended the day in negative territory.

Information technology weighed the heaviest, down 2.6%, followed by real-estate stocks, off 1.8% and metals and mining stocks, down 1.2%.

Global base metals led the five gainers, up 1%, while gold stocks advanced 0.5% and consumer staples gained 0.4%.

The TSX Venture Exchange skidded 1.79 points to 1,289.62, while the Nasdaq Canada index faded 22.67 points to 609.42.

ON WALLSTREET

In New York, after seesawing through the session, stocks staged a rally to end higher Monday, with financial, technology and commodity shares leading the charge.

The Dow Jones Industrials grew 76.71 points to end the day at 9.789.44. The S&P 500 index gained 6.69 points to 1,042.88. The Nasdaq composite index moved ahead 4.09 points to 2,049.20.

Stocks rallied in the morning after a key manufacturing index spiked to its highest level in 3 1/2 years in October. An upbeat reading on pending home sales and Ford Motor's big profit report also added to the morning bounce, giving investors a reason to jump back into stocks after last week's selloff.

But the morning rally turned sour in the afternoon as weakness in financial, tech and transportation shares spearheaded a broader retreat. By the last hour, short-term investors used the selling as an opportunity to jump back in and scoop up a variety of shares.

Stocks slipped at the end of October, bringing Wall Street's seven-month winning streak to a halt. The S&P 500 plunged 5% between the rally high of Oct. 19 and last Friday. Prior to that, the S&P 500 had surged 63% off of 12-year lows hit in March.

Ford Motor delivered its first quarterly profit in more than a year Monday, helped by the government's Cash for Clunkers program.

The company said it earned nearly $1 billion U.S., or 29 cents U.S. a share. The automaker was expected to post a loss of 12 cents U.S. a share, according to Thomson Reuters estimates.

Ford shares rose 7.7% Monday.

On the economic front, three reports helped lift investor sentiment Monday.

A survey by the Institute for Supply Management showed nationwide manufacturing activity jumped to 55.7 in October, from 53 the previous month. Economists surveyed by Briefing.com had predicted a more modest gain to 54. Numbers above 50 signal growth, while figures below 50 suggest contraction.

The Commerce Department said construction spending rose unexpectedly by 0.8%. Economists surveyed by Briefing.com were anticipating a 0.5% decline.

Meanwhile, the National Association of Realtors reported that the number of signed sales contracts to buy homes rose in September for the eighth straight month. Pending home sales rose much more than expected, by 6.1%, in September. Analysts were looking for a 1.2% increase.

Small business lender CIT filed the fifth-largest U.S. bankruptcy on Sunday as part of a reorganization plan that has the support of most of the company's debtholders.

CIT said it has already worked out a reorganization plan with bondholders that it expects to speed the Chapter 11 process and reduce CIT's debt by $10 billion U.S.

Treasury prices were down, raising the yields for the benchmark 10-year note to 3.43% from Friday's 3.39%. Prices and yields move in opposite directions.

The price of a barrel of oil picked up $1.13 to $78.14 U.S.

Gold prices hiked $14 to $1,054 U.S. an ounce.