North American stocks lost most of their early gains on Thursday in midday trading after optimism that Washington is moving toward a budget agreement disappeared.
Shortly after noon, the S&P 500 was up 3 points or 0.2 per cent, to 1413 – but down nearly 7 points from its intraday high. The blue-chip Dow Jones industrial average was down 3 points or zero per cent, to 12,982. In Canada, the S&P/TSX composite index was up 52 points or 0.4 per cent, to 12,192.
The market moves had been much stronger soon after the start of trading, as investors continued to place bullish bets on Washington reaching an agreement on a budget and averting the so-called fiscal cliff of rising taxes and spending cuts. However, the optimistic streak ended after House Speaker John Boehner said that there had been “no substantive progress” made in the talks.
U.S. initial jobless claims fell to 393,000, down from 416,000 in the previous week. That was in line with economists’ expectations but still above the recent low of 370,000 claims.
Within the S&P 500, telecom stocks rose 0.4 per cent, health care stocks rose 0.3 per cent and technology stocks rose 0.2 per cent. Consumer discretionary stocks fell 0.2 per cent and energy stocks fell 0.1 per cent.
Within Canada’s benchmark index, tech stocks rose 1.4 per cent – powered by a 6 per cent gain by Research In Motion Ltd., after an analyst at Goldman Sachs upgraded the stock to a “buy” recommendation.
Energy stocks rose 0.8 per cent and financials rose 0.7 per cent, but materials were flat.
Among commodities, gold rose to $1,726 (U.S.) an ounce, up $10. Crude oil rose to $88.24 a barrel, up $1.75.
In Europe, the U.K.’s FTSE 100 rose 1.2 per cent and Germany’s DAX index rose 0.8 per cent.