Energy stocks pull TSX lower

The Toronto stock market was modestly lower mid-morning Monday as energy stocks declined alongside oil prices and traders digested a major earnings disappointment from IBM Corp.The S&P/TSX composite index gave back 33.93 points to 14,193.75. The Canadian dollar gained 0.08 of a cent to 88.76 cents US.U.S. markets were mixed with the Dow Jones industrials down 85.75 points to 16,294.66, the Nasdaq climbed 16.83 points to 4,275.27 and the S&P 500 index rose 1.02 points to 1,887.78.IBM was a major drag on the Dow as its shares tumbled 7.5 per cent after the company announced that its adjusted earnings were $3.68 per share, while revenue totalled $22.4 billion. The showing missed expectations of $4.32 per share on revenue of $23.39 billion.IBM also said that it will pay $1.5 billion to Globalfoundries in order to shed its costly chip division. It took a $4.7-billion charge for the third quarter as it also delivered a disappointing outlook.The energy group was the leading TSX decliner with November crude off 64 cents to US$82.11 a barrel. Energy companies have been a major casualty of the selloff, with the sector down 15 per cent in the last month while demand concerns and rising supplies have sent oil down 14 per cent over that time.The industrials sector was down 0.6 per cent as Canadian Pacific Railway Ltd. (TSX:CP) confirmed Monday it held exploratory talks about a possible combination with U.S. railway CSX Corp. but those discussions have ended without a deal and no further talks are planned. CP shares dropped $2.59 to C$222.40.The base metals sector gave back 0.35 per cent while December copper was two cents lower at US$2.99 a pound.The TSX is down about nine per cent from its September highs, the Dow is down five per cent and the S&P 500 is off 6.5 per cent amid worries the eurozone could slip back into recession and a global economic downgrade by the International Monetary Fund.Central banks have also figured largely in the market sentiment. The selloff comes just days before the end of the U.S. Federal Reserve’s key stimulus program that involved the purchase of hundreds of billions of dollars of bonds, an exercise that has kept long-term rates low and encouraged the rally on stock markets over the last few years.Investors are also looking for the European Central Bank to do more to reduce deflationary pressures and encourage growth.The TSX found support Monday from earnings as Valeant Pharmaceuticals International Inc. (TSX:VRX) reported US$275.4 million of quarterly net income, or 82 cents a share, and adjusted earnings of $718.8 million or $2.11. Analysts had estimated $2 per share of adjusted income and 64 cents in net earnings.Valeant also raised its fourth-quarter adjusted profit estimate and its 2015 revenue growth forecast and its shares rose $5.10 to C$140.54.The gold sector was also supportive, up 1.2 per cent while December gold gained $6.40 to US$1,245.40 an ounce.Elsewhere, Ottawa-based communications equipment maker Mitel Networks Corp. (TSX:MNW) has offered to buy ShoreTel Inc. for about $540 million in cash but the proposal has been rejected by the California-based company’s board. Mitel slipped nine cents to $9.41.