North American markets opened indecisively, as traders shrugged off news of a debt deal for Greece and instead focused on the challenges to come, including averting the U.S. fiscal cliff.
In early trading, the S&P/TSX index is up about one point, or 0.01 per cent, at 12,186, receiving some help from an 8 per cent jump in Bombardier shares on news of a major business jet order. The S&P 500 is down nearly 2 points, or 0.1 per cent, at 1,404; and the Dow Jones industrial average is down 20 points, or 0.1 per cent, at 12,947.
A batch of U.S. economic data this morning didn't help sway market sentiment much, even though U.S. durable goods orders for October were stronger than expected, coming in unchanged instead of the 1 per cent drop economists had forecast. The S&P Case-Shiller Home Price Index for September rose 3 per cent, in line with expectations. U.S. consumer confidence figures for November came in at 73.7, a little better than the 73 that was expected.
Euro-area finance ministers and the International Monetary Fund agreed late Monday that Greek public debt should fall to 124 per cent of GDP in 2020 through a package of extra debt-cutting measures totalling 20 per cent of GDP. Euro member states are now expected to disburse €43.7 billion ($56.8-billion (U.S.) of aid to Greece in several tranches.
While a welcome development in the European debt crisis, it's seen as only a temporary fix for the longer-term challenges to come for the region. The OECD put these risks in the spotlight this morning by slashing its global growth forecasts, warning that the debt crisis in the recession-hit euro zone is the greatest threat to the world economy. The Paris-based think-tank forecast that the global economy would grow 2.9 per cent this year before expanding 3.4 per cent in 2013. The estimate marked a sharp downgrade since the OECD last estimated a rate in May of 3.4 per cent for this year and 4.2 per cent in 2013.
Meanwhile, traders are focused on the fiscal cliff of tax increases and spending cuts set to take hold Jan. 1 unless the U.S. political parties can agree to terms to avert it. There have been a number of comments from Republicans in recent days that suggest they may be flexible on allowing taxes to rise, but only through axing certain tax loopholes for the wealthy rather than actual tax rate increases.
European markets overnight were stronger on the debt deal, but Asian markets were mixed. Tokyo shares reached seven-month highs, but the Shanghai index fell more than 1 per cent on worries that corporate profit growth in China may be slowing.
Here's a look at some stocks moving on news so far this morning:
Bombardier Inc. shares surged 8 per cent at the open after scoring the biggest business-jet sale in its history, signing a $7.8-billion (U.S.) deal with VistaJet for up to 142 global business aircraft.
Manulife Financial Corp. appointed Marianne Harrison to head the company’s Canadian division. She had been president of Manulife’s John Hancock Long Term Care Insurance in the United States since 2008. Shares are unchanged at the open.
ConAgra is buying Ralcorp Holdings Inc. for $4.95-billion (U.S.). Ralcorp shares are up 26 per cent.
McMoRan Exploration shares are down 18 per cent after JPMorgan said the company has zero equity value after the company's update on its Gulf of Mexico development activities raised more questions about commercial viability.