The Toronto stock market finished below the breakeven line Thursday as worries about the worsening European debt crisis focused on France.
The S&P/TSX composite index ended the day down 47.35 points, to 12,108.87, amid reports that France could be have its credit rating placed on negative credit watch by one of the big ratings agencies.
The Canadian dollar regained 0.65 cents to 98.31 cents U.S.
The TSX had jumped 104 points in early trading with reports of new leadership for debt-plagued countries Italy and Greece.
Risk appetite had earlier picked up on speculation that a technocratic government led by economist Mario Monti would replace Italian Prime Minister Silvio Berlusconi.
Italy’s borrowing costs eased somewhat after spiking Wednesday as markets lost confidence that Berlusconi could impose the tough austerity measures needed to keep Europe’s third-largest economy from defaulting on its $2.6-trillion U.S. debt.
And former European Central Bank vice-president Lucas Papademos has been officially named the new prime minister of Greece. He replaces George Papandreou who stepped down in the wake of an ill-starred attempt to put his country’s bailout plan to a referendum.
The TSX energy sector was flat as Suncor Energy gained 17 cents to $31.61.
Among financials, Scotiabank down 34 cents to $50.99 while TD Bank dropped 33 cents to $71.87.
Metal prices headed lower with the December copper contract down nine cents to $3.35 U.S. a pound on top of another nine-cent slide Wednesday. The TSX mining sector was off as Inmet Mining was down 48 cents to $57.43 while First Quantum Minerals shed $1.56 to $18.20.
In the gold sector, Barrick Gold Corp. faded 22 cents to $52.02 and Kinross Gold Corp. was down 34 cents to $14.06.
In the industrials sector Canadian National Railways gained $1.53 to $80.59.
The earnings parade continued, with copper producer Quadra FNX Mining Ltd. taking in nearly $142.8 million U.S. or 75 cents a share in the three months ended Sept. 30. That compared with earnings of $19.5 million U.S. or 10 cents last year.
Revenues rose to $326.2 million U.S. from $259.2 million U.S. as the company benefited from higher metals production. Its shares gained nine cents to $10.95.
Shares in coffee store operator Tim Hortons Inc. rose 55 cents to $50.09 as it said profits soared 40% in the third quarter to $103.6 million. Revenues totaled $726.9 million, up from $670.5 million. Same-store sales, a key metric measuring results from stores open at least a year, were up 4.7% in this country and 6.3% in the United States.
Tissue and cardboard maker Cascades Inc. lost $19 million in the third quarter as the company booked special charges for restructuring investment losses and other things. Sales for the three months rose 14% to $947 million from $832 million and its shares were flat at $4.65.
The owner of the controversial New Prosperity copper project in British Columbia, Taseko Mines Ltd., had $30-million worth of black ink in the third quarter. The results came a day after Ottawa gave the Vancouver-based company a chance to revive the $1.2-billion proposal, which was blocked last year. Taseko shares were down seven cents to $3.42.
On the economic front, Statistics Canada reported a trade surplus with the rest of the world for the first time since last January. Our merchandise exports improved 4.2% in September, with imports sliding 0.3%.
As a result, Canada's trade balance with the world went from a deficit of $487 million in August to a surplus of $1.2 billion in September.
ON BAYSTREET
The TSX Venture Exchange regained 3.56 points to 1,624.56, while the Nasdaq Canada index gave back 8.98 points to 399.84
Of the 14 Toronto subgroups, eight were negative on the day. Metals and mining stumbled 2.2%, information technology lost 1.3%, and materials were off 1.2%.
The half-dozen gainers were spirited up by a 1% gain by consumer discretionaries, while industrials gathered 0.8% and health-care issues were up 0.4%.
ON WALLSTREET
In New York, stocks snapped back Thursday from a steep selloff a day earlier, but investors continue to keep a cautious eye on Europe's unfolding debt crisis, as French bond yields spiked and Italian bond yields eased slightly.
The Dow Jones Industrials remained positive by 112.92 points, or nearly 1%, to close at 11,893.86
The S&P 500 gained 10.60 points to 1,239.70, while the Nasdaq Composite Index poked ahead 3.50 points to 2,625.15, Green Mountain Coffee Roasters and Apple weighing on the tech-heavy index.
Cisco Systems shares rallied, after the networking giant posted a fourth straight quarter of declining earnings Wednesday. The company reported more than 12% growth in its video and collaboration divisions.
Green Mountain shares sank after the company reported sales that widely missed expectations late Wednesday. Earnings also came in slightly below forecasts.
On Wednesday, yields on 10-year Italian bonds spiked to 7.48%, marking the highest level since the euro launched in 1999. The 7% level sparked fear among investors, sending them fleeing for the exits on worries that yields would continue to move higher -- eventually leading to Italy needing a bailout.
Italy is the world's eighth largest economy and Europe's fourth largest. It also maintains the biggest bond market in Europe. With yields still hovering around that 7% level, sentiment is far from optimistic.
It's a psychological trigger for investors, since 7% was the level that heightened worries about Greece, Ireland and Portugal. All three eventually needed some type of bailout.
Economically speaking, the number of jobless Americans filing for initial unemployment insurance dropped 10,000 to a seven-month low of 390,000 in the latest week. The expectation was for jobless claims to increase to 400,000 last week, from 397,000 in the previous week.
U.S. import prices fell 0.6% in October, after remaining unchanged in September. Export prices fell 2.1% in October -- the largest monthly decline since December 2008, when export prices fell 2.2%.
Moreover, America’s international trade deficit in goods and services fell to $43.1 billion U.S. in September, from a revised $44.9 billion U.S. in August, after exports hiked more than imports. The number was less than the $45.9 billion U.S. expected.
The 10-year yield spiked to 2.06% from 1.96% late Wednesday, on substantially lower prices. Treasury prices and yields move in opposite directions.
Oil for October delivery advanced $1.95 to $97.69 U.S. a barrel
Gold futures for December delivery fell $32.00 to 1,759.60 U.S. an ounce
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