The Toronto stock market was little changed late morning Tuesday as the latest developments in Italy discouraged buyers.
As the clock approached noon, the S&P/TSX composite index was still ahead 11.41 points to 12,473.30, after the government of Italian Premier Silvio Berlusconi won an important budget vote. The result left him without a majority in parliament, leaving investors unclear whether the country can weather a growing debt crisis.
The Canadian dollar slipped 0.03 cents to 98.73 cents U.S.
Political uncertainty in the euro-zone’s third-largest economy rocked financial markets for yet another day and Italy’s borrowing rates spiked to their highest level since the euro was established in 1999.
The yield on Italy’s 10-year bonds jumped as high as 6.74% before settling down to 6.7%. A rate of over seven per cent is considered unsustainable and proved to be the trigger point that forced Greece, Ireland and Portugal into accepting financial bailouts.
With debts of around €1.9 trillion, Italy is considered by many as being too big for Europe to bail out, like it has already done for Greece, Portugal and Ireland.
The base metals sector gained as the December copper contract lost early gains and was unchanged at $3.54 U.S. a pound. Teck Resources was ahead 65 cents at $39.96 and Ivanhoe Mines gained 40 cents to $22.92.
The financials sector was ahead with Royal Bank ahead 25 cents to $46.25.
The TSX energy sector was little changed as Suncor Energy declined five cents to $33.21 and Imperial Oil was up 16 cents at $42.52.
The industrials sector was ahead while Bombardier Inc. advanced 10 cents to $4.35.
The gold sector dropped as Goldcorp Inc. faded 32 cents to $53.98.
In earnings news, Uranium One Inc. had a profit of $45.8 million in the third quarter, a big improvement from a year ago loss of $44.8 million, as it more than doubled revenue compared with the same time last year. Its shares gained five cents to $2.84.
TMX Group’s net income increased 21% in the third quarter to $67 million, helped by stronger derivatives trading, clearing and both listing and information services. Revenue in the quarter was $167.8 million, up 15% from the third quarter of 2010 and its shares gained nine cents to $44.44.
Shares in Finning International Inc. were off 29 cents to $23.51 as the heavy equipment dealer reported earnings of $35 million or 21 cents a share in its latest quarter. That is down from $63 million a year ago as the company was hit by costs related to a new parts system. Finning missed analyst estimates of 26 cents a share.
On the economic front, Canadian Mortgage and Housing Corporation reported Tuesday that housing starts remained essentially steady in October, falling 0.6% to 207,600 annualized units from September’s 208,800. Market expectations were for a bigger drop, of 6.1% to 195,000.
ON BAYSTREET
The TSX Venture Exchange prospered 4.60 points to 1,666.52, while the Nasdaq Canada index moved backward 2.03 points to 426.43
Of the 14 Toronto subgroups, 10 were in positive country, led by metals and mining, gaining 1.3%, health-care stocks, up 1.2%, and materials, ahead 0.5%.
The three laggards were information technology, off 0.6%, energy, down 0.3%, and utilities, subsiding 0.01%.
Industrials were flat by noon.
ON WALLSTREET
In New York, stocks were mixed Tuesday afternoon, as investors digested the outcome of a parliamentary vote concerning the fate of Italian Prime Minister Silvio Berlusconi.
A key vote on Italy's budget reforms passed with 308 votes, with all those present on the floor voting for the measure with the exception of one abstention. However, more than half of the country's 630 lawmakers did not take part in the vote, a sign that Berlusconi has lost his parliamentary majority and could be forced to resign.
The Dow Jones Industrials had faded 39.36 points by noon to 12,029
The S&P 500 gave back 2.19 points to 1,258.93, while the Nasdaq Composite Index eased 2.85 points to 2,692.40.
Shares of McCormick and Schmick's jumped after restaurant operator Landry's agreed to buy the seafood chain for $8.75 U.S. per share.
Fossil posted third-quarter earnings results that topped Wall Street's expectations, but lowered its guidance for the current quarter, due to a strengthening dollar. Shares of the fashion accessories maker dropped.
Shares of Rackspace advanced after the web hosting company posted a healthy profit on better-than-expected sales late Monday. Shares of Priceline also gained on an earnings beat.
While the hope is that Italy will be able to quickly put a new government in place with the ability to implement major structural reforms, that will not be enough to solve Italy's budget problems, said May.
Stocks clawed out gains after a choppy day of trading Monday, as the focus of the European debt crisis shifted from Greece to Italy. Borrowing costs in Italy skyrocketed Monday, with the yield on the 10-year note hitting a record high of 6.8%.
The European debt crisis has kept investors on edge for months. And trading is likely to remain volatile in the near-term, with the Group of 20 summit in France last week failing to produce any tangible new solutions.
The price on the benchmark 10-year U.S. Treasury fell, raising the yield to 2.02% from 1.99% late Monday. Treasury prices and yields move in opposite directions.
Oil for October delivery gained 49 cents to $96.01 U.S. a barrel
Gold futures for December delivery gained $12.30 to top $1,800 U.S. an ounce
