North American stocks were off their earlier lows in midday trading on Wednesday, as investors reacted to rising European bond yields and disappointing U.S. pending home sales.
The S&P 500 was down less than 4 points or 0.2 per cent, to 1560, after falling as low as 1552 near the start of trading. The blue-chip Dow Jones industrial average was down 41 points or 0.3 per cent, to 14,518. In Canada, the S&P/TSX composite index was down 39 points or 0.3 per cent, to 12,668.
Bloomberg News reported that European governments are vowing that the unusual bailout used in Cyprus will not serve as a template for future financial rescues, despite what the Dutch finance minister said earlier in the week.
Yet, bond yields of financially unstable euro zone countries reflected concern – especially with the leader of Italy’s Democratic Party rulling out the possibility of forming a coalition government, adding political instability into the mix.
The yield on the Italian 10-year government bond surged 19 basis points, to 4.74 per cent. Yields on Portuguese and Spanish government bonds also rose.
In the United States, pending home sales in February rose just 5 per cent over last year, disappointing expectations for a gain of 8.7 per cent.
Within the S&P 500, financials fell 0.7 per cent, while industrials and technology stocks fell 0.4 per cent each. Defensive utilities and health-care stocks rose modestly.
Dollar General Corp. fell 1.9 per cent after announcing it will sell 30 million shares in a secondary offering.
Cliffs Natural Resources Inc. fell 15.7 per cent after analysts at Morgan Stanley warned that the iron ore producer will face lower commodity prices with the arrival of new supply.
Within Canada’s benchmark index, energy stocks fell 0.4 per cent and financials fell 0.7 per cent. Industrials were relatively flat and materials rose 0.4 per cent.
Research In Motion Ltd. fell 0.3 per cent ahead of its earnings report on Thursday morning.
In Europe, the U.K.’s FTSE 100 was down less than 0.1 per cent and Germany’s DAX index was down 1 per cent in late afternoon trading.