Market players are indecisive this morning, with major U.S. indexes fluctuating in and out of the red as worries over the euro zone -- now officially in recession -- and the U.S. fiscal cliff keep bargain hunters largely on the sidelines.
The S&P/TSX has suffered the steepest losses among the North American indexes so far, but it's off its lows. At 1020 a.m. (ET), it was down 68 points, or 0.5 per cent, at 11,861 after falling earlier by triple digits to a low of 11,761.
The S&P 500 index was up 2 points, or 0.2 per cent, at 1,358, while the Dow Jones industrial average was down 1 point, or 0.01 per cent, at 12,569.
Commodities are mixed, with oil up 27 cents at $86.59 (U.S.) and gold down $11.80 at $1,718.30. The economically-sensitive energy and materials sectors of the TSX are down by more than 1 per cent, but even utilities are posting losses.
The economic data rush this morning didn't help market sentiment very much. Most notable was a surge in U.S. initial jobless claims to their highest level since 2011. But much of that gain was tied to the temporary effects of Hurricane Sandy.
From a technical perspective, markets appear oversold. The 14-day relative-strength index for the S&P 500, for instance, fell to 27.7 on Wednesday. That's the first time since June that the gauge of market momentum slid below 30. The move comes after major U.S. indexes broke below their 200-day moving averages in recent sessions.
The main blame has been tied to worries that the U.S. is heading towards the fiscal cliff of tax increases and spending cuts at the end of this year, since a divided Congress may not be able to apply the brakes on time. President Barack Obama on Wednesday was both tough-minded and conciliatory at a White House press conference, saying he is open to discussing most ideas but none that would prevent the richest Americans from paying higher taxes.
There are growing feelings, however, that the 5.1 per cent fall in the S&P 500 since Mr. Obama's re-election is at least already partly pricing in a failure to prevent the fiscal cliff. That suggests stocks could be heading for a rally if Washington can move beyond the gridlock that has been the bane of its recent existence.
Still, risks for equity players extend well beyond U.S. politics. Market players are a bit rattled by the news out of the Middle East, where there was an Israeli air strike on Gaza Wednesday. Overnight, more signs emerged of the dire situation in situation in Europe, as the euro zone slipped into its second recession since 2009 and retail sales in Britain posted a surprise fall in October.
Here's a rundown of how the economic data came in this morning, and the stocks that are moving on early news:
Statistics Canada said manufacturing sales in September rose 0.4 per cent, but they were down 0.7 per cent when the aerospace sector is removed.
Canadian home sales dipped 0.1 per cent in October from September’s level, the Canadian Real Estate Association reported. Meanwhile, the national average price of homes that were sold in October was $361,516, an increase of just 0.02 per cent compared to the average selling price a year earlier.
The U.S. Commerce Department said the consumer price index in October rose 0.1 per cent from September, as economists expected.
U.S. jobless claims last week surged 78,000 to 439,000, an 18-month high. That's much higher than the 376,000 that economists had forecast, but much of the rise was blamed on Hurricane Sandy.
The U.S. Philadelphia Fed Survey for November came in at a negative 10.7. Economists expected a reading of 4.5, a drop from the previous month's 5.7, although the range from analysts varied widely.
BP has agreed to pay a criminal penalty in the billions of dollars for the 2010 oil spill in the Gulf of Mexico, AP is quoting sources as saying. Shares are up 2 per cent.
Wal-Mart reported third-quarter earnings per share of $1.08, close to expectations, although revenues were a tad light of what analysts predicted. Shares are down 4 per cent.
Target Corp. said fiscal third-quarter earnings rose 15 per cent as the retailer’s revenue increased slightly more than expected. It also forecast fourth-quarter adjusted earnings of $1.64 to $1.74 a share, better than the $1.51 a share expected by analysts. Shares are up 0.8 per cent.
Viacom said net income grew 13 percent in the most recent quarter even as revenue fell more than Wall Street expected with the lack of a strong theatrical release. Shares are up 3.2 per cent.
Tembec Inc. said its fourth-quarter loss widened to 47 cents a share from 17 Canadian cents. Shares are down 8 per cent.
Canadian Satellite Radio Holdings Inc. said it swung to a third-quarter loss of 3 cents a share from a profit of 7 cents a year earlier. Shares are up 3 per cent.