The Toronto stock market registered a minor loss late morning Tuesday as Greece weighed on markets for a second day as the country's leaders continued to negotiate terms of a second bailout to avoid looming bankruptcy.
The resource-heavy S&P/TSX composite index came back from a loss of over 100 points in early trading. The main index was down 15.91 points to 12,543.93 as financials turned positive and resource stocks bounced off early lows whiles commodity prices largely recovered from early losses.
The TSX Venture Exchange was off 3.99 points to 1,660.23.
The Canadian dollar also erased early losses as the American currency weakened, rising 0.09 of a cent to 100.54 cents (U.S.). The loonie had sunk as low as 100.21 cents U.S. earlier in the morning as commodity prices retreated and traders worried that Greece will default on its debt bought into the U.S. dollar.
U.S. markets turned positive with the Dow Jones industrial average up 31.67 points to 12,876.8.
The Nasdaq composite index rose 5.08 points to 2,907.07 and the S&P 500 index was up 1.83 points to 1,346.16.
Athens must clinch a $130-billion (CAN) bailout deal from the euro zone and the International Monetary Fund and avoid a March default on its bond repayments, which would cause havoc in the financial system.
But first, Greek leaders have to agree on another series of harsh austerity measures. Greek party leaders were to hold further meetings Tuesday to seek an agreement.
Those discussions were taking place amid a general strike disrupting public services and thousands of protesters taking to the streets of Athens.
But analysts pointed out that the country's doesn't have much room to manoeuvre.
“Whether they like it or not, they are going to have to take it if they want to stick around (in the euro zone),” said Sik Mokhtari, market technician at CIBC World Markets.
“You can only throw good money after bad for so long. And they will eventually shut down if they don't (agree on austerity measures). They have no choice.”
A stronger U.S. dollar usually helps depress oil and metal prices, which are denominated in dollars, as it makes commodities more expensive for holders of other currencies.
The energy sector declined 0.96 per cent while the March crude contract on the New York Mercantile Exchange turned around and jumped $2.09 to $99 (U.S.) a barrel. Prices had earlier been depressed on analyst estimates that crude inventories likely rose about 2.3 million barrels last week.
Crude supplies in the U.S. have increased for the past three weeks at a key Cushing, Oklahoma delivery point amid a mild U.S. winter.
Imperial Oil (TSX:IMO) gained 55 cents to $47.60 while Canadian Natural Resources (TSX:CNQ) was down $1.33 to $38.95.
The base metals component slipped 1.25 per cent while copper prices narrowed most of the early losses and was down a penny to $3.86 (U.S.) a pound. Teck Resources (TSX:TCK.B) lost 51 cents at $41.99 and Ivanhoe Mines (TSX:IVN) dropped 36 cents to $16.68.
There was major dealmaking in the resource sector.
Mining giant Xstrata PLC and commodities dealer Glencore International PLC have agreed to merge in a $90-billion (U.S.) deal that would create the world's fourth largest natural resources group.
The combined company will control a chain of businesses from mining to refining, storage and shipping of basic commodities like coal, copper and corn. Its properties would include major nickel mining and refining businesses in Canada, where Xstrata subsidiary Xstrata Nickel owns the former Falconbridge nickel company in Sudbury, Ont.
The gold sector was off 0.17 per cent as the April bullion contract shook off early losses and advanced $14.20 to $1,739.10 (U.S.) an ounce. Barrick Gold Corp. (TSX:ABX) gained 35 cents to $49.25.
Shares in Centerra Gold (TSX:CG), the operator of the largest gold mine in Kyrgyzstan, were down 42 cents to $18.30 as its workers in the Central Asian country went on strike in a demand for additional payments to a state social fund. Centerra said that it deems the work stoppage illegal and that their collective agreement is in force until the end of the year.
The financials sector turned positive with Manulife Financial (TSX:MFC) up nine cents to $12.36 and Royal Bank (TSX:RY) rose 11 cents to $53.58.
Industrials also moved out of the red as Bombardier Inc. (TSX:BBD.B) added 17 cents to $4.83.
Research In Motion Ltd. (TSX:RIM) shares were ahead 27 cents to $16.80 after oilfield services provider Halliburton Co. said it would replace its 4,500 company-issued BlackBerrys with Apple Inc. iPhones to help employees do their jobs more effectively in the field. A Halliburton spokeswoman said the company is switching because the iPhone does a better job of supporting company applications like Insite Anywhere, which displays information on well construction and completion.
European markets were mainly lower amid poor economic data from Germany.
Industrial production in Europe's biggest economy fell 2.9 per cent in December from the month before, suggesting the country's economic slowdown could be worse than expected.
The government has cut its estimate for 2012 growth from 1.0 per cent to 0.7 per cent as the crisis over too much government debt in some countries weighs on Germany and its trade partners in the 17-nation euro zone.
London's FTSE 100 index slipped 0.17 per cent, the Paris CAC 40 rose 0.13 per cent while Frankfurt's DAX lost 0.16 per cent.
In earnings news, Canfor Pulp Products Inc. (TSX:CFX) handed in a $5.9-million quarterly profit, compared to a loss of $11.3-million a year ago. But its shares fell 79 cents to $12.96 after the forestry firm cut its quarterly divided to 25 cents per share from 40 cents.
Canfor noted that global softwood pulp markets are expected to remain soft into the first quarter of this year.
