Markets give back some of previous day’s gains

Markets opened lower Wednesday after Tuesday’s triple-digit gains on news of a rejected $39-billion bid for Canada’s fertilizer giant Potash Corp. of Saskatchewan Inc.

The Toronto Stock Exchange’s S&P/TSX composite index fell 67.14 points, or 0.57 per cent, to 11,661.50.

Gold fell $7 to $1,221.30 U.S. an ounce. On the New York Mercantile Exchange, oil fell $1.60 U.S. to $74.17 U.S. a barrel.

The U.S. Department of Energy crude oil inventories are expected to decline by one million barrels this week. "However, crude seems to have been ignoring the inventory data recently, with technical factors and a weaker global economic outlook dominating the price action," according to a note by Sacha Tihanyi, currency strategist at Scotia Capital.

"This indicates that (Tuesday’s) action was more of a trading bounce due to bears taking a day off than a renewal of bullish sentiment. With a light corporate and economic news calendar for the rest of the week and with the end of summer vacation season starting, we may continue to see listless, indecisive swings within current consolidation ranges for the next several sessions," Colin Cieszynski of CMC Markets Canada said in a note.

Potash Corp., the world’s biggest fertilizer producer, said Tuesday it had rejected an unsolicited offer from Australia’s BHP Billiton Ltd. Potash Corp. stock surged 25.68 per cent to close at $147.34 on the TSX. On Wednesday, Billiton took the bid to shareholders.

The Canadian dollar continued its upward climb to 96.97 cents U.S., up 16 basis points. The loonie rose more than a full U.S. cent Tuesday on the Potash Corp. announcement.

In economic news, the number of people receiving regular employment insurance benefits rose by 8,400 in June, the third straight monthly gain in EI rolls, Statistics Canada said Wednesday. The increase brought the total number of EI beneficiaries to 691,600 in June, the federal agency said. Despite recent gains, beneficiaries have fallen by 137,700, or 16.6 per cent, since the peak in June 2009, it said.

In the U.S. the Dow Jones industrial average fell 63.04 points, or 0.61 per cent, to 10,324.81, while the Nasdaq composite index was down 11.1 points, or 0.5 per cent, to 2,198.34.

Retail giant Target and construction equipment maker John Deere both beat expectations with their quarterly earnings Wednesday.

Markets were mixed overseas. London’s FTSE lost 29.48 points, to 0.55 per cent, to 5,321.07 at midday. In Frankfurt, Germany’s DAX gained 7.38 points, to 0.12 per cent, to 6,213.78, and the Paris CAC lost 0.87 points, to 0.87 per cent, to 3,662.26.

The Nikkei in Japan closed up 78.86 points, to 0.86 per cent, to 9,240.54, while Hong Kong’s Hang Seng fell 114.70 points, to 0.54 per cent, to 21,022.73.

On Tuesday, the S&P/TSX composite index closed up 175.88 points, or 1.52 per cent, to 11,728.64. The Dow was up 103.84 points, or 1.01 per cent, to 10,405.85. The Nasdaq gained 27.57 points, or 1.26 per cent, to 2,209.44.