North American stock markets opened with a softer, more cautious tone after the Dow's impressive record-breaking run from last week. Some disappointing economic data overnight out of China, as well as still unresolved fiscal matters in the U.S., have investors wondering whether a short-term correction in equities is approaching.
In early trading, the S&P/TSX composite index was down 13 points, or 0.1 per cent, at 12,821. Both oil and gold prices were little changed, helping to maintain a steady tone.
Shares in Research In Motion Ltd. were up about 6 per cent. AT&T announced today that it will sell the new Z10 BlackBerry 10 smartphone model starting Tuesday for $199.99 (U.S.), with shipments to begin March 22.
The Dow Jones industrial average - which had closed at record highs for four consecutive days - was down 14 points, or 0.1 per cent, at 14,383. The S&P 500, less than 1 per cent away from its all-time high, was down 3 points, or 0.2 per cent, at 1,548.
In Asia overnight, Chinese stocks were down 0.3 per cent as the country released data showing a rise in inflation to 3.2 per cent in February from a year earlier, the highest bump since April of last year. The rise from inflation of 2 per cent in January was likely tied to a short-term increase in prices during the Lunar New Year holiday. Meanwhile, industrial production in China grew 9.9 per cent in January and February, slowing from a 10.3-per-cent gain in December. Year-over-year retail sales during that two-month period also slowed to 12.3 per cent from 15.2 per cent in December.
European stocks this morning are mostly lower, but not by much, and London's FTSE 100 is bucking the trend, up 0.2 per cent. Italy's FTSE MIB index is particularly under pressure, down 0.5 per cent. Late Friday, there was a reminder about how precarious Italy's governing situation has become after Fitch Ratings cut the country's credit rating one notch to triple-B-plus. Italian bond yields edged higher in the wake of the downgrade, an action that was tied to the country's inconclusive elections last month.
Here in North American, the focus is turning back to fiscal battles in Washington. Automatic spending cuts are taking hold in the U.S. after the Democrats and Republicans failed to reach a budget deal at the start of this month. Economists warn U.S. gross domestic product growth will be under pressure later this year if the spending cuts stay in place.
Officials from the House and Senate budget committees this week will release proposals that are aimed at averting a partial shutdown of the government by March 27. Right now, it appears acrimonious negotiations lie ahead, a recipe for market instability.
In other stock moves this morning, Dell Inc. shares were up 0.7 per cent after Carl Icahn said he entered into a confidentiality agreement with the computer maker. This came less than a week after the activist investor joined a growing chorus of opposition to co-founder Michael Dell’s plan to take the firm private.
Genworth Financial Inc. shares were up nearly 7 per cent after Barron's this weekend ran a bullish story on the company titled "Why genworth will finally reward investors."