North American stocks closed lower Tuesday, delivering their weakest performance of the young year, as a series of negative developments gave investors plenty of excuses to sell.
Slumping commodity prices drove Canada's S&P/TSX composite index to its first triple-digit loss in four weeks, closing down 126.95 points, or 1.1 per cent, at 11,820.18.
Meanwhile, worries about corporate earnings were the main catalyst in the U.S. declines. The Dow Jones industrial average lost 36.73 points, or 0.3 per cent, to 10,627.26, the S&P 500 fell 10.76 points, or 0.9 per cent, to 1,136.22, and the Nasdaq composite index slumped 30.10 points, or 1.3 per cent, to 2,282.31.
Tuesday's negative tone was actually established shortly after Monday's close, when aluminum giant Alcoa Inc. - the first major U.S. company to report its financial results for the fourth quarter - reported that its profit from continuing operations, excluding one-time charges, was 1 cent (U.S.) a share - well below the 6 cents a share analysts had expected. Its stock, one of 30 stocks that make up the Dow, tumbled 11 per cent Tuesday.
The morning's economic data added to the dark mood. Canada's trade balance slipped into a surprise deficit for November, while the U.S. deficit widened more than expected.
Meanwhile, commodities prices slumped after China announced a tightening of its moneatry policies, fuelling concern of a slowdown in that country's demand. That weighed on Canada's resource-heavy stock market.
Crude oil fell $1.96 to $80.56 a barrel in New York. Gold lost $23.40 to $1,128 an ounce.
Nine of the S&P/TSX's 10 industry sub-indexes closed lower, led by the gold-laden materials group, off 2.9 per cent. The heavily weighted energy group fell 1.1 per cent, while the information technology sector lost 1.3 per cent. The day's only gain came from telecoms, up 0.6 per cent.
The Canadian dollar fell half a cent to 96.22 cents (U.S.).
On Wednesday, U.S. investors will be looking at the Federal Reserve Board's release in the afternoon of its Beige Book - the latest summary of economic conditions reported by experts and business leaders in the various regions of the Federal Reserve system. The Beige Book give market watchers a glimpse into the economic perceptions of the Fed as it assesses monetary policy.
The Canadian economic calendar is clear, but there are a couple of mid-level earnings reports on tap before the market opens - Cogeco Cable and Corus Entertainment. The next key earnings release for the U.S. market doesn't come until after Thursday's close, when technology bellwether Intel Corp. is slated to release its numbers.