North American stocks ended the day mixed and with a less-than-enthusiastic tone, as the Canadian market posted a modest decline while major U.S. index closed up, but well off their earlier highs.
Toronto's S&P/TSX composite index closed down 25.77 points or 0.2 per cent at 12,232.83. In New York, the Dow Jones industrial average rose 60.01 points or 0.5 per cent to 12,482.07. The S&P 500 rose 4.58 points or 0.4 per cent to 1,293.67, while the Nasdaq composite index close up 17.41 points or 0.6 per cent at 2,728.08.
Markets started the day in an upbeat mood, as a couple of short-term bond auctions in Europe were met with solid investor demand, shrugging off the European credit-rating downgrades issued by Standard & Poor's on Friday and Monday.
That, along with an encouraging report on regional manufacturing activity from New York state and news that China's economy grew a still-solid 8.9-per-cent annualized in the fourth quarter, generated a positive tone in global markets. Most major European and Asian stock indexes gained more than 1 per cent, while China's major indexes jumped more than 4 per cent, and Hong Kong's Hang Seng index gained 3.2 per cent.
But the Bank of Canada's interest rate statement, which warned about uncertainties and downside risks in the economic outlook as well as noting the continued growth of Canadian household debt, contributed to a muted tone in Canadian stocks. Gold stocks also fell, as bullion lost its overnight momentum and retreated from its early highs.
Meanwhile, disappointing earnings from major U.S. bank Citigroup fuelled a downturn in U.S. financial stocks, trimming the gains in the U.S. market. The Dow had been up more than 150 points at its early-session peak.
In Toronto, the major industry subindexes were mixed, with five closing higher, four lower and one unchanged. But the day was dominated by the materials group's 2-per-cent slide. Kinross Gold plunged 21 per cent, after announcing that its Tasiast mine in Africa faces major delays that could result in a potentially massive writedown. Barrick Gold Corp. also lost 2.1 per cent.
On the upside, the information technology group gained 1.5 per cent. Its biggest stock, Research in Motion Ltd., jumped 5 per cent amid buzz that South Korea's Samsung Electronics Co. may be looking at buying the troubled handheld-device maker. The energy group rose 0.5 per cent, as crude oil gained $2.22 (U.S.) to $100.92 a barrel in New York amid a general upturn in commodity prices on the day.
On Wednesday, investors will be looking at U.S. producer price data, as well as the National Association of Home Builders' housing index. Canadians will be watching the Bank of Canada's quarterly Monetary Policy Report, which will add substantial detail to the nervous tone of Tuesday's interest rate statement. More U.S. banking earnings will also roll out Wednesday, including those of Goldman Sachs Group Inc. and US Bancorp. Internet giant eBay Inc. will also report its quarterly results.