TORONTO – The Toronto stock market was well in the red Tuesday afternoon as traders weighed earnings results and data showing the effect of a slowdown in China’s property market.

The S&P/TSX composite index dropped 78.48 points to 15,136.78.

Mining stocks and energy stocks led decliners as data showed that service industries in the world’s second-biggest economy grew at the slowest rate last month since November 2005. The HSBC index of China service businesses activity based on a survey of 400 companies fell to 50.0 in July from 53.1 in the previous month.

The Canadian dollar was down 0.31 of a cent to 91.21 cents US.

Readings on the U.S. non-manufacturing sector and factory orders beat forecasts but failed to encourage buyers. A selloff on U.S. markets that began last week resumed Tuesday following a one-day advance.

The Dow Jones industrials more than erased Monday’s 76-point climb, tumbling 186.11 points to 16,383.17, the Nasdaq fell 45.85 points to 4,338.04 and the S&P 500 index was down 23.38 points to 1,915.61.

The U.S. Institute for Supply Management’s nonmanufacturing index showed solid expansion, climbing to 58.7 in July from 56 in June, versus the 56.5 gain that economists had expected.

June factory orders climbed 1.1 per cent after dropping 0.5 per cent, much better than the 0.6 per cent rise that was expected.

The lacklustre showing on markets added to sharp losses on the TSX and N.Y. markets last week when the Toronto market lost 1.55 per cent and the Dow industrials slid 2.75 per cent. Among other things, traders fretted over the prospect of the Federal Reserve hiking interest rates sooner than thought after second quarter economic growth came in much better than expected. Those worries were front and centre again Tuesday in the wake of the ISM and factory orders data.

Geopolitical concerns have also weighed on the markets

But analysts also point to the fact that the rally on stock markets has been going practically without interruption for over five years and that a correction could be in the cards.

“It’s a pause for investors to take another hard look at what things look like going forward,” said Stephen Carlin, vice president and senior portfolio manager at CIBC Asset Management.

“We don’t see this as a longer-term trend in the prospects for the market going forward.”

Resource stocks were lower amid falling commodity prices.

The base metals sector lost 1.37 per cent as September copper slipped four cents to US$3.20 a pound.

The gold sector shed 1.12 per cent while December bullion faded $3.60 to US$1,285.30 an ounce.

September crude declined $1.15 to US$97.14 a barrel and the energy sector eased 0.9 per cent.

Meanwhile, the Canadian earnings season remains in high gear with reports out this week from a variety of major corporations.

The consumer staples sector was up 0.5 per cent with Saputo shares (TSX:SAP) up $1.04 to $68.61 after Canada’s largest dairy producer reported that quarterly net income rose to $145.3 million or 73 cents a share, up from $136.7 million, or 69 cents, a year ago. The company also said that it is boosting its quarterly dividend and splitting its stock two-for-one through a special payment to shareholders.

A massive TSX decliner was Vancouver-based mining company Imperial Metals (TSX:III). Its stock plunged 38 per cent to $10.43 after a tailings pond in central B.C. was breached over the weekend. Imperial says the situation has stabilized and added the cause of the breach is unknown.