The Toronto stock market was little changed Tuesday, as markets stabilized a day after worries about global manufacturing performance helped send North American exchanges into a sharp selloff.
The S&P/TSX composite index slipped 6.13 points to 13,480.07 as of late morning. The Canadian dollar was up 0.2 of a cent to 90.31 cents (U.S.).
U.S. indexes were positive despite data out Tuesday showing that U.S. factory orders dropped 1.5 per cent in December. The decline was smaller than than the 1.8 per cent dip that was expected.
The Dow Jones industrials were ahead 65.06 points to 15,437.86, the Nasdaq gained 28.42 points to 4,025.38 while the S&P 500 index climbed 10.81 points to 1,752.7.
Stocks plunged Monday after data showed the U.S. manufacturing sector continued to expand in January but at a slower pace than expected.
Other data showed a similar performance for China’s manufacturing sector, which added to anxieties about emerging markets.
These negative developments come at a time when the U.S. Federal Reserve is cutting back on a key stimulus measure –bond purchases that kept long-term rates low and supported a strong rally on stock markets.
The withdrawal of stimulus is also proving to be difficult for emerging markets that had benefited from a steady inflow of cheap money courtesy of Fed easing. Now, they’re being hit with steady outflows of that money, which in turn has pressured currencies and raised worries that economic problems in emerging countries could spread to developed markets.
Some analysts suggest markets that benefited strongly from the Fed’s loose monetary policy have been ripe for a correction. The S&P 500 rocketed more than 30 per cent last year but is already down 5.75 per cent from the start of 2014.
“If the markets hadn’t had the big run, they would be more immune to bad news,” said Kash Pashootan, portfolio manager at First Avenue Advisory in Ottawa, a Raymond James Company.
“The market will not grant a whole lot of patience with bad news because of the fact we’re paying top dollar for (stocks).”
The TSX telecom sector was the major decliner, down almost one per cent.
But Atlantic regional telco Bell Aliant Inc. gained 33 cents to $25.42 as it reported $69-million of quarterly net income, up $3.3-million from a year ago. Adjusted earnings of 38 cents a share beat estimates of 35 cents.
The metals and mining group led advancers, up one per cent.
The energy sector rose 0.45 per cent as March crude in New York gained 92 cents to $97.356 (U.S.) a barrel.
Suncor Energy’s quarterly operating earnings were $973-million or 66 cents a share, 12 cents short of expectations. It also hiked its dividend 15 per cent to 23 cents a share and its shares fell 62 cents to $35.02 (Canadian).
The TSX gold sector was flat while April gold declined $10.10 to $1,249.80 (U.S.) an ounce.
In other corporate developments, WestJet gained 33 cents to $25.18 as the carrier posted $67.8-million of quarterly net income, or 52 cents per diluted share, which met expectations. WestJet also raised its quarterly dividend by 20 per cent to 12 cents a share.