The Toronto stock market was slightly lower at the open following a sharp advance the previous session as traders looked to the eurozone after France lost its AAA credit rating.
Moody’s Investors Service cited concerns over France’s prospects for economic growth and its exposure to Europe’s financial crisis. S&P had also downgraded Europe’s second-biggest economy in January.
The S&P/TSX composite index slipped 14.25 points to 12,026.15 after running up 163 points on optimism U.S. politicians can avoid a budget crisis at the end of next month.
The Canadian dollar was down 0.03 of a cent to 100.31 cents U.S.
Oil was down 79 cents to $88.49 (U.S.)a barrel.
U.S. indexes were also lower, held back by earnings disappointments from tech giant Hewlett Packard and electronics chain Best Buy. The Dow Jones industrials dipped 44.53 points to 12,751.43 after charging ahead 208 points on Monday while the Nasdaq was 7.78 points lower at 2,908.28 and the S&P 500 index slipped 4.53 points to 1,382.36.
Consumer discretionary companies, a group that includes hotels, luxury retailers and media companies, managed a small gain. Technology companies fell the most.
Hewlett-Packard CEO Meg Whitman said that there were “serious accounting improprities, disclosure failures and outright misrepresentations” at the company, Autonomy, which makes search engines. She stopped short of alleging fraud.
In economic news, the government said that U.S. builders started construction last month on the most homes and apartments since July 2008, more evidence that the housing market's recovery is gaining momentum.
Homebuilder stocks were among the best performers in the market. PulteGroup gained almost 5 per cent, D.R. Horton advanced more than 2 per cent, and Lennar gained almost 2 per cent.
On Monday, the Dow soared 207 points. Investors focused on signs over the weekend that congressional Republicans and the White House might be able to reach a deal on tax increases and government spending cuts set to take effect Jan. 1.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note rose 0.01 percentage point to 1.63 per cent.