Traders work on the floor of the New York Stock Exchange in this file photo.© Brendan McDermid / Reuters/Reuters
North American markets are reluctant to commit to a direction in early trading, with major indexes virtually unchanged.
The S&P/TSX index is hovering near Thursday's close; the S&P 500 is down one-third of a point at 1,415; and the Dow Jones industrial average is down 2 points, or 0.02 per cent, at 13,019.
The Canadian dollar is down about one-tenth of a cent, at 1.0060. It's been trading choppily since third-quarter gross domestic product data was released this morning. The economy grew only 0.6 per cent, instead of the 0.8 per cent economists had expected. Exports fell at the fastest pace in more than three years, as business investment and the housing market cooled.
Equity markets were looking a little more positive earlier this morning before the U.S. released weaker-than-expected readings on U.S. personal income and spending. The U.S. Commerce Department said personal income in October was flat, instead of rising by 0.2 per cent as forecast by economists. Personal spending declined 0.2 per cent, instead of coming in as flat.
One of the few stocks grabbing the market's attention this morning is Zynga Inc. Its shares are down 8 per cent in early trading after Facebook Thursday changed its agreement with app developers, opening the way for more competition for Zynga.
Markets have shown considerable sensitivity this week to every sign of progress or lack thereof in the negotiations to avert the so-called fiscal cliff, which threatens to significantly slow the world's biggest economy at a time when it's still trying to recover from the last recession. Despite today's lackluster open, volatility is likely to only pick up as the deadline approaches.
On Thursday, House Speaker John Boehner said that there had been "no substantive" progress in the budget talks, sparking immediate selling in markets. But other key figures in Washington were more optimistic, with Democratic Senator Chuck Schumer later saying progress was being made and White House spokesman Jay Carney said the Barack Obama administration remained optimistic. The White House reportedly called for $1.6-trillion in new tax revenue and an unlimited debt ceiling.
With more substantive talks still to come, markets may be overreacting to the daily comments coming out of the Beltway. Most feel an agreement will be reached and the Republicans will have to cave in eventually on tax increases of some kind for the wealthy, given that the Democrats campaigned on doing exactly that. But with the euro zone crisis settling down for now, and corporate earnings season over, it's been the clear focus and Washington is notorious for being unpredictable.
Overnight, German lawmakers approved the latest bailout for Greece by a large majority and euro zone unemployment rose again in October to 11.7 per cent from 11.6 per cent. In Asia, Japan's cabinet approved a $10.7-billion economic stimulus package just weeks before an election the ruling party is expected to lose.
Darcy Keith