The Toronto stock market was slightly higher at midday Monday as bullion prices made strides amid traders' fears about Europe's debt problems.
The S&P/TSX composite index added 32.89 points to 12,441.14. The junior Venture exchange was 3.89 points higher at 1,653.9.
Worries about the state of Italy's finances drove the price of gold up $28.90 to $1,785 (U.S.) an ounce. On the TSX, shares in Barrick Gold Corp. added 98 cents to $53.21 (CAN).
Italy's borrowing rates spiked Monday to their highest levels since the country adopted the euro and there was speculation that Italian Prime Minister Silvio Berlusconi may resign. Markets fear that Italy's debts are too large to be handled by an international bailout.
“The big story in Europe today has been the Italian market. While Greece managed to cobble together a coalition to pass the recent bailout agreement and then hold elections, the situation in Italy remains fluid,” said Colin Cieszynski, a market analyst at CMC Markets Canada.
“Italy is a far bigger fish than Greece which may force EU policy makers to take much more prompt and decisive action.”
The Canadian dollar turned around an earlier loss to add 0.02 of a cent to 98.38 cents U.S.
Oil prices added 71 cents to $94.97 a barrel (U.S.). Copper prices lost two cents to $3.54 a pound.
Wall Street markets moved lower. The Dow Jones industrial average fell 30.04 points, to 11,953.2, while the S&P 500 index fell 5.5 points, to 1,247.77. The Nasdaq index dropped 20.87 points to 2,665.28.
Following last week's turmoil centred on worries that Greece was heading for imminent bankruptcy, investor fears are now focused on Italy, the eurozone's third-largest economy. Italy is also the third-biggest debt market in the world.
If its cost of borrowing rises too much, the country wouldn't be able to raise the money it needs to roll over its debts, creating big problems for the European banking system and the global economy.
Greece's two main political parties reached a deal over the weekend to share power in a new government, increasing the likelihood that the country will move ahead with austerity measures it promised to implement as part of a financial rescue agreement with its lenders. That relieved investors by reducing the chances of an imminent default by Greece, which would rattle financial markets and cause losses for major European banks.
But in Italy, Berlusconi's government faces a confidence vote this week. Berlusconi rejected suggestions that he resign to make way for more cost-cutting.
The finance ministers of the 17 countries that use the euro are meeting again later Monday, but it's not clear they'll have any more success than the G-20 summit of world leaders did in Cannes, France last week.
In Canadian corporate news, uranium miner Cameco shares dropped 7.8 per cent or $1.70 at $20.07 after it said its third-quarter profits dropped 60 per cent to $39-million from $98-million a year earlier. On a per share basis earnings were 10 cents compared to 25 cents.
RioCan Real Estate Investment Trust tripled its third-quarter net earnings to $168-million, or 63 cents per unit, up from $56-million or 23 cents per unit a year ago, on various acquisitions. Shares were up 15 cents to $25.07 on the TSX.
Ensign Energy said its net profit in its latest quarter was $64-million or 52 cents per share in the three months ended Sept. 30. That was double the $32-million, or 21 cents per share, the company made in the same quarter a year ago. Its shares added 32 cents to $15.67 each.
The union representing Air Canada's flight attendants says an arbitrator has issued a decision that establishes a new collective agreement with the Montreal-based carrier. The union said it was “profoundly disappointed” with the decision that imposes provisions of a tentative agreement rejected by employees last month. Shares in Air Canada were up 2.2 per cent or three cents to $1.39.
Monday is a quiet day for economic reports in both Canada and the United States, although the Federal Reserve will report in the afternoon on how much American consumers borrowed in September.
In Europe, Germany's DAX was 0.7 per cent lower and Britain's FTSE fell 0.16 per cent, while France's CAC-40 fell 0.8 per cent.
Earlier, Asian shares fell, with Japan's Nikkei 225 index dropping 0.4 per cent to close at 8,767.09. South Korea's Kospi lost 0.5 per cent to 1,919.10 and Australia's S&P/ASX 200 was down 0.2 per cent at 4,273.40.
Hong Kong's Hang Seng sank 0.8 per cent to 19,677.89. Mainland China's benchmark Shanghai Composite Index lost 0.7 per cent to 2,509.80 and the Shenzhen Composite Index lost 0.6 per cent to 1,065.31.
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