The Toronto Stock Exchange was little changed near midday Tuesday, as the influential gold and mining sectors regained some ground and investors took in mixed North American economic data.
The S&P/TSX composite index was down 21.72 points to 11,763 after jumping between positive and negative territory all morning. The junior venture exchange gained 3.5 points to 1,558.52.
The Canadian dollar added 0.17 of a cent to 96.53 cents (U.S.) after a report showed retail sales in September were better than expected. The loonie had been down against the greenback early in the day.
Retail sales rose one per cent to $38.2-billion during the month, Statistics Canada reported Tuesday, with sales growth at most store types. It was the fifth increase in six months.
Scotia Capital economist Derek Holt said the retail sales report was much better than anticipated, with headline sales rising at twice as fast a pace as expected. He said the report is a sign the overall economy was performing well.
“With all of our observable leading indicators now in place, we are looking for a pretty decent gain in September real GDP as an increase in housing, price-adjusted retail sales and manufacturing shipments outweigh a decline in real wholesale sales and hours worked,” Holt said in a note to clients.
The January oil contract added 44 cents to $97.36 (U.S.) a barrel. The December gold contract was up $19.50 to $1,698.10 (U.S.) an ounce and the copper contract gained three cents to $3.33 (U.S.) a pound.
Investors also took in updated third-quarter gross domestic product figures from the United States that showed the U.S. economy grew at a modest two per cent rate in July-September quarter, lower than first estimated.
Wall Street markets moved lower. The Dow Jones industrial average shed 65.92 points to 11,481.39 and the Nasdaq index lost 14.75 point to 2,508.39. The S&P index lost 6.5 points to 1,186.58.
American markets will be operating on a very short work week because of the U.S. Thanksgiving holiday on Thursday, which could leave many investors on the sidelines. Lower volumes and the potential for increased volatility could spell more selling pressure on stock markets this week.
Accordingly, many investors are likely squaring up their positions before taking a break and starting fresh when they come back on Monday, said John Johnston, chief strategist at Davis Rea Ltd.
“One of the things we learned in 2008 is really bad things can happen on the weekend or days when the markets are closed. And the rest of the world will be functioning on Thursday, so it's a time to keep it close to your vest,” he said.
“It's not the time of year you want to take big risks.”
While some traders are selling for tax loss purposes and others are taking advantage of low equity valuations to buy, the overriding mood is one of caution, he added.
“There's some good things going on, but there's some really scary things too. People are fairly negative,” he said.
And while there was a slight rebound in commodity prices Tuesday, Johnston noted it was from a big fall Monday.
“The commodity trade is driven by the global cycle and right now the best estimates I have for the global economy is it's still downshifting. Growing yes, but at a slower rate.”
Stocks took a pummelling on Monday after a so-called supercommittee in Congress failed to reach a deal to cut the U.S. federal budget deficit by $1.2-trillion over 10 years. While not entirely unexpected, the failure heightened worries that political bickering — in the U.S. and Europe — will hurt efforts to cut debt during a period of declining economic growth.
In Canadian corporate news, baked goods and grocery giant George Weston Ltd.(TSX:WN) reported third-quarter net earnings attributable to common shareholders of $264-million or $1.94 per share, compared with $176-million or $1.26 per share in the same 2010 period. Revenue for the three months ended Oct. 8 was $10.06-billion, up from $9.8-billion in the prior-year period. Shares added a cent to $65.90.
Magnotta Winery Corp. (TSX:MGN) shares soared 55 per cent a day after the company said it has been advised by the Magnotta family, which controls the company, that it intends to take the wine producer private at $2.90 a share. Magnotta shares were halted on the TSX pending the news from the company. When trading resumed the stock gained 99 cents to $2.81.
Meanwhile, European countries are locked in a debate over how to provide a lasting solution to their debt crisis, which is causing borrowing rates to rise to dangerous highs for ever-larger countries.
Spain's borrowing costs soared Tuesday in an auction of short-term debt, suggesting investors remain cautious about the country's financial future despite a convincing electoral win this week by conservatives bent on deficit-cutting austerity.
Britain's FTSE 100 was up 0.08 per cent, while Germany's DAX lost 0.9 per cent and France's CAC-40 was down 0.7 per cent.
Egypt's stock exchange temporarily suspended trading for nearly an hour Tuesday amid an escalating political crisis. The EGX30 index closed 4.78 per cent lower, or at 3,676 points.