Stocks slide after early jump

Bay Street stocks have posted notable declines on Monday, easily erasing an early-morning rally. Weakness in the commodity-related sectors has led the declines.

As the final bell was about to sound, the S&P/TSX composite index had plummeted 138.27 points, or 1.2%, to 11,243.86.

Among gold stocks, Seabridge plunged 7.4% to $24.07 and Yamama was down 4.7% to $12.06, New Gold dropped 4.9% to $4.10 and Agnico-Eagle Mines was down 2.9% to $70.04.

Iamgold Corp. turned to the downside by 2.3% to $14.16. The stock had surged earlier after announcing it now projects 2009 production of about 940,000 - 950,000 ounces of gold, an increase of 30,000 ounces over its prior guidance issued in June 2009.

Mining stocks were down, with Inmet sliding 5.7% to $63.22, HudBay dropped 3.6% to $14.40 and Teck Recources was down 2% to $34.12.

Birchcliff Energy declined 5.4% to $7.56 after being downgraded to "hold" from "buy" at Genuity Capital Markets.

Rogers Communications added 0.2% or five cents to $28.94 after the company made an investment to become a shareholder in Vuguru, a web video studio.

Toromont Industries Ltd. slipped 0.8% to $24.81 after the stock posted third-quarter net earnings of $31.9 million or $0.50 per share compared with $37.1 million or $0.56 per share in the same quarter last year.

Coretec rallied 47.8% to 17 cents after receiving a buyout offer from DDi Corp. for $0.20 per share, or approximately $3.6 million.

Canfor Pulp Income Fund gained 0.4% to $5.66 after the company reported its third quarter net income of $18.3 million or $0.26 per share, compared to $11.1 million or $0.15 per share in the same period last year.

The Canadian dollar dropped 1.21 cents to 93.80 cents U.S.

ON BAYSTREET

All but one of the 14 TSX subgroups finished the day in the red. Gold was 2.7% to the bad, followed by metals and mining, off 2.5%, and materials, sliding 2.4%.

The lone gainer proved to be information technology, advancing 1%.

The TSX Venture Exchange stumbled 30.09 points to 1,303.82, while the Nasdaq Canada index lost 6.56 points to 692.08.

ON WALLSTREET

In New York, stocks tumbled Monday afternoon, erasing morning gains, as a strong dollar battered commodity shares and the financial sector tumbled.

The Dow Jones Industrials subsided 104.22 points, or just over 1%, to 9,867.96. The S&P 500 index lost 12.65 points to 1,066.95. The Nasdaq composite index settled back 12.62 points to 2,141.85.

The dollar turned weaker on the back of a stronger-than-expected bond auction, pressuring dollar-traded commodities and big multinationals that benefit from the weak dollar.

Stocks ended last week lower, with investors not impressed by the latest spate of better-than-expected quarterly results, including Microsoft and Amazon.com late in the week.

After that selloff, stocks managed to gain through most of Monday morning. But the early weakness in the financial sector grew as the session wore on -- and the dollar reversed course, dragging on commodities.

On the Dow, 27 of 30 issues fell, including Bank of America, JPMorgan Chase, Chevron, IBM, Caterpillar, Boeing and United Technologies.

Since bottoming at a 12-year low on March 9, the S&P 500 has gained nearly 60%, with any modest selloff being met with renewed buying interest. But in the last week that trend has changed a little, with the buyers sitting out.

Dow component Verizon Communications said profit tumbled 30% as higher costs countered an increase in revenue thanks to its strong wireless business. Nonetheless, earnings topped expectations. The company also reported higher quarterly revenue. But shares slipped, getting dragged down in the bigger selloff.

Just shy of 140 components of the S&P 500 are due to report quarterly results this week. With 206 companies, or 41% of the S&P 500 having already reported, profits are currently on track to have fallen 18.3% from a year ago, according to Thomson Reuters.

So far, results have been soundly above forecasts, with 81% of companies topping expectations, 7% meeting and 12% missing.

Capmark Financial, one of the country's largest commercial real estate lenders, filed for bankruptcy protection Sunday, reflecting the major problems in the business property sector.

Dutch financial services firm ING said Monday it plans to spin off its insurance business and sell $11.3 billion U.S. of stock to pay back some of what it took in bailout money from the government last year.

Treasury prices fell, raising the yields for the benchmark 10-year note to 3.56% from Friday's 3.49%. Prices and yields move in opposite directions.

The price of a barrel of oil fell $1.82 to $78.59 U.S.

Gold prices gave back $14 to $1,043 U.S. an ounce.