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Traders on the floor of the New York Stock Exchange on Monday, July 23, 2012 in New York. (Henny Ray Abrams/Associated Press)
Traders on the floor of the New York Stock Exchange on Monday, July 23, 2012 in New York. (Henny Ray Abrams/Associated Press)

Inside the Market

At the open: Markets mixed as analysts cut targets on Apple Add to ...

North American stock markets were mixed at the open, as investors continued to show reluctance to establish new positions with the U.S. budgetary talks coming down to the wire.

In early trading, the S&P/TSX composite index was down 23 points, or 0.2 per cent, at 12,273; the S&P 500 was up 7 points, or 0.5 per cent, at 1,421; and the Dow Jones industrial average was up 56 points, or 0.4 per cent, at 13,191.

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Apple Inc. shares were trading on both sides of unchanged after dipping below $500 in the premarket, a level they haven't seen since last February. The company said today it sold over 2 million units of its new iPhone 5 in its first weekend on sale in China, a record for the company’s smartphone.

However, Apple did not release comparable three-day sales figures for the iPhone 4S, the 5’s predecessor, which went on sale in January. And analysts today were expressing more caution over the stock. Citigroup downgraded Apple to "neutral" from "buy,' saying that recent checks showed "near-term supply-chain order cuts that bring into question the strength of iPhone 5." It slashed its price target by $100 to $575.

Canaccord Genuity also this morning cut its price target, citing softer sales expectations in international markets, especially in Europe, for the iPhone and iPad. Canaccord maintained a "buy" rating though as it reduced its price target by $25 to $750.

The "fiscal cliff" remains the key focus for markets. There were hints of progress in the budget negotiations over the weekend. House Republican leader John Boehner reportedly told President Barack Obama that he might accept higher taxes on millionaires in exchange for scaling back spending for entitlement programs such as Medicare. While that may be the first time the Republicans expressed a willingness to raise taxes, the White House has been pressing for tax increases for individuals making more than $200,000.

There's only about two weeks remaining to reach a budget deal that would avert the more than $600-billion in tax hikes and spending cuts set to take hold at the start of next year. But there is also now increasing talk in Washington about the benefits of extending the talks into January.

Japan was in the spotlight overnight after the Liberal Democratic Party decisively won weekend elections. That's expected to usher in new monetary easing and economic stimulus measures in the country. The Nikkei rose nearly 1 per cent to its highest in eight months and the yen fell against the greenback.

Here's a look at some other stocks moving on news this morning:

Sun Life Financial has agreed to sell its U.S. annuity unit and certain life insurance businesses for $1.35-billion (U.S.) to Delaware Life Holdings, a company owned by shareholders of Guggenheim Partners. Sun Life shares opened down 1.6 per cent.

First Quantum Minerals Ltd. has made a hostile, but improved, takeover bid for Inmet Mining, now offering to buy the company at $72 per share, up from $70. First Quantum shares opened down 3 per cent; Inmet opened up 5.2 per cent at $73.50, suggesting investors think a higher price may still be forthcoming.

Sprint Nextel said it reached a deal to buy out the minority shareholders of Clearwire for $2.2-billion, or $2.97 a share, up from $2.90. Sprint shares are up nearly 1 per cent; Clearwire is down 12 per cent.

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