Markets in Toronto plunged without a parachute at Tuesday’s open, as jitters over the situation in Europe – primarily Greece – overshadowed good vibes on the economic front.
The S&P/TSX Composite Index fell 156.48 points – or 1.3% -- to 11,704.18
The Canadian dollar sank 0.62 cents to 100.08 cents U.S.
Among the stocks to watch in Canada this morning, Air Canada and the union representing its 3,000 pilots will start 10 days of talks on Thursday under a government-appointed arbitrator, in a final effort to agree on a new labour contract.
Uranium One Inc. reported a drop Monday in quarterly profit as lower realized uranium prices outweighed higher sales volumes.
Miner Alexco Resource Corp. said its quarterly profit fell 62% hurt by lower metal prices.
Rival miner Avalon Rare Metals Inc. said on Monday it expects delays in a feasibility study on its flagship Nechalacho rare earth project in the Northwest Territories, as it needs more time to complete metallurgical studies.
On the economic slate, Canada Mortgage and Housing Corporation said housing starts unexpectedly surged in April by 14% to an annualized rate of 244,900, due primarily to a 27.4% surge in urban multiple starts, to 158,500.
ON BAYSTREET
The TSX Venture Exchange tumbled 41.55 points to 1,355.87, while the Nasdaq Canada fell 4.59 points to 382.22.
All 14 Toronto subgroups lost ground Tuesday, with metals and mining suffering the most, at 3.9%. Gold doffed 3.3% and materials shed 3.1%.
ON WALLSTREET
U.S. stocks opened lower Tuesday as Greece's uncertain political situation keeps investors on edge.
The Dow Jones Industrials collapsed 152.73 points, or 1.2%, at the open to 12,855.80
The S&P 500 ducked back 17.22 points to 1,352.36. The tech-rich Nasdaq Composite Index slipped 45.14 to 2,912.62.
Shares of fashion accessories maker Fossil plunged after it reported first-quarter revenue that fell short of even the lowest forecasts.
Fast food chain Wendys reported operating income of one cent U.S. a share, falling short of analysts' forecasts for a profit of three cents U.S. a share.
Shares for Electronic Arts slipped after the video-game maker cut its first-quarter outlook for the period ending in June.
The Government Accountability Office issued a report Tuesday that the U.S. Treasury may eventually turn a $15.1-billion profit on its bailout of insurer AIG when all final payments and asset sales are complete.
McDonald's Corp.'s same store sales increased 3.3%, both globally and in the U.S. market. Analysts were expecting sales to grow 5%, according to Reuters. Sales rose 3.5% in Europe, but only 1.1% in the company's unit that includes Asia-Pacific, Middle East and Africa.
In other corporate news, shares of DirecTV slipped even as the broadcast satellite provider reported slightly better earnings and sales in line with forecasts.
Entertainment conglomerate and Dow component Walt Disney will report earnings after the close. The studio had a blockbuster weekend with "The Avengers," which broke records with box office sales of $200.3 million U.S. during opening weekend, although those sales will not be included in this report, while an estimated $200 million U.S. in losses on epic bomb "John Carter"
All eyes will continue to be on Europe, a day after Greece's main center-right party failed to form a coalition government. Now, the left-wing coalition, which is opposed to austerity as the way to close Greece's debt gap, will have three days to form a government.
The latest development feeds investors' fears that Greece might have to drop out of the euro-zone
As various parties grapple with forming a coalition government in Greece, it's looking increasingly likely that new elections will need to be held, most likely in mid-June. That throws into question whether Greece will be forced to renegotiate its bailout funding.
Greek leftist leader Alexis Tsipras on Tuesday laid out the radical agenda he hopes to pursue if he becomes prime minister, including the cancellation of international loan agreements to Greece that forced the country into sharp budget cuts.
In the bond market, investors bought €1.3 billion worth of short-term Greek government bills out of €2.6 billion offered. The yield was 4.69%, up from 4.55% at the last auction in April.
The price on the benchmark 10-year U.S. Treasury strengthened, pushing the yield down to 1.84% from Monday’s 1.88%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil fell $1.43 to $96.51 U.S.
Gold futures for June delivery dropped $26.40 to $1,612.70 U.S. an ounce.
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