Toronto's main stock index barely cleared breakeven Tuesday morning, after Chinese manufacturing data showed signs of improvement. Experts said gains might be limited by weak euro-zone data and mounting concerns that Spain may need a full bailout.
The S&P/TSX Composite index eked ahead 4.36 points to begin the session at 11,549.90
The Canadian dollar strengthened 0.15 cents to 98.35 cents U.S.
Stocks to watch this morning include Husky Energy, the integrated oil producer and refiner, which reported a 36% fall in second-quarter profit on lower production and weaker realized crude oil prices.
Cable behemoth Rogers Communications Inc. reported higher adjusted earnings as it boosted revenue and margins in its mobile phone business despite rising competition.
On the economic slate, Statistics Canada reported this morning that Retail sales rose less than expected in May, up 0.3%, compared to expectations for a 0.5% rise. Excluding autos, sales rose a firmer-than-expected 0.5% (the consensus being 0.1%).
ON BAYSTREET
The TSX Venture Exchange regrouped 1.23 points to 1,175.39. The Nasdaq Canada index recovered 1.59 points to 333.19.
In all, eight of the 14 Toronto subgroups were negative in the first hour of trading, weighed mostly by global base metals, off 0.6%, metals and mining, down 0.5%, and financials, sliding 0.2%.
The five gainers were led by telecoms, up 1.4%, while gold and industrials each rose 0.3%. Information technology issues were flat at the open.
ON WALLSTREET
U.S. stocks staggered Tuesday as a report showing an improvement in Chinese manufacturing offset ongoing worries about Europe.
The Dow Jones industrial average declined 62.97 points to open at 12,658.50
The S&P 500 retreated 1.96 points to 1,348.56. The Nasdaq fell 5.93 points to 2,884.22.
DuPont shares edged lower after the chemical maker's revenue fell short of expectations, and said it expects full-year earnings to be toward the lower end of its outlook.
AT&T shares rose after the mobile provider delivered higher earnings and revenue thanks to strong subscriber growth during the quarter.
DeVry's stock tumbled 29% after the for-profit education provider warned that it would earn far less than what analysts had been expecting in the fourth quarter, citing a shortfall in revenue, rising costs and a one-time charge.
Rival Apollo Group, which operates the University of Phoenix, was also trading lower early Tuesday. JPMogran lowered its stock price target on the company to $43 from $47 U.S.
UPS shares fell after the shipping company reported earnings and sales that fell short of forecasts, and cut its outlook. The company blamed uncertainty in the United States, Europe's debt crisis and weak Asian exports.
Shares of Regions Financial climbed after the company posted a second-quarter profit that more than tripled from a year ago. The company was able to post robust results by slashing its provisions for bad loans by more than 90%.
Early Tuesday, HSBC said its China Manufacturing Purchasing Managers' Index came in at 49.5 for July. While any reading below 50 indicates contraction, it is the highest number reported since February and shows significant improvement.
Rating agency Moody's cut the outlook on Germany's prized Aaa credit rating to "negative" after the closing bell Monday, citing concerns about the stability of the euro-zone and the potential for more bailouts.
Moody's also revised its outlooks on the Aaa ratings of the Netherlands and Luxembourg to "negative." Finland is the only country in the 17-nation euro-zone to maintain its Aaa rating and a stable outlook.
Meanwhile, European manufacturing activity remains sluggish. Activity continued to contract across the euro-zone in July, while Germany's PMI fell to a three-year low.
Spain remains in the spotlight, with the yield on the 10-year bond hitting a fresh euro-era record high of 7.625%. That came as Spain successfully auctioned €3 billion of three-month and six-month government bills, but investors demanded higher interest rates amid ongoing fears that Spain could require a full-blown bailout.
Economically speaking, the Federal Housing Finance Agency was release its Housing Price Index for May at 10 a.m. ET.
The price on the benchmark 10-year U.S. Treasury nipped back, pushing the yield up to 1.45% from 1.44% late Monday. Treasury prices and yields move in opposite directions.
Oil for September delivery tacked on 54 cents to $88.68 U.S. a barrel.
Gold futures for August delivery fell $3.30 to $1,574.10 U.S. an ounce.
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