The initial excitement on markets in Toronto had faded by midday, as perhaps some doubt had set in over whether Italy and Greece could settle trillions of national debt.
Nonetheless, the S&P/TSX composite index approached noon down only 24.94 points, to 12,131.28, coming off a 104-point advance soon after the opening bell.
The Canadian dollar regained 0.46 cents to 98.13 cents U.S.
Risk appetite had earlier picked up on speculation that a technocratic government led by economist Mario Monti will replace Italian Premier Silvio Berlusconi. Italy’s borrowing costs eased somewhat after spiking Wednesday as markets have lost confidence that Berlusconi can impose 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.
Stock markets fell heavily Wednesday, with the TSX tumbling 333 points and the Dow industrials falling 389 points as traders sold off anything risky on the feeling that Europe’s debt crisis is worsening amid a failure of political leaders to come up with a convincing plan to backstop heavily indebted countries like Italy and Greece.
TSX energy sector gained ground, with Suncor Energy improving 25 cents to $31.69 and Cenovus Energy advanced by 25 cents to $33.38.
The financials sector also made headway, with Scotiabank ahead 37 cents to $51.70.
However, metal prices headed lower with the December copper contract down eight cents to $3.36 U.S. a pound on top of a nine-cent slide Wednesday. The TSX mining sector was off as Teck Resources was up 33 cents to $38.06 while First Quantum Minerals shed 61 cents to $19.15.
The gold sector was down as Kinross Gold Corp. was down 11 cents to $14.29.
The earnings parade continued, with copper producer Quadra FNX Mining Ltd. earnings 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 slipped one cent to $10.85.
Shares in coffee store operator Tim Hortons Inc. rose 32 cents to $49.86 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 ahead two cents at $4.67.
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 four cents to $3.45.
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 settled back 2.25 points to 1,618.75, while the Nasdaq Canada index gave back 7.62 points to 401.20
Of the 14 Toronto subgroups, eight were negative by noon. Metals and mining stumbled 1.4%, materials were off 0.8%, and gold slid 0.5%.
The half-dozen gainers were spirited up by a 1.1% gain by consumer discretionaries, while health-care stocks took on 0.9% and industrials gathered 0.7%.
ON WALLSTREET
In New York, stocks lost some steam Thursday, as French bond yields spiked and Italian bond yields eased ever so slightly.
Worries about Europe's deepening debt crisis have been growing as Italy's borrowing costs have skyrocketed this week and today's rise in French bond yields isn't helping.
The Dow Jones Industrials remained positive, though, by 129.57 points, or 1.1%, to greet lunch hour at 11,910.50
The S&P 500 recovered 11.42 points to 1,240.52, while the Nasdaq Composite Index poked ahead 8.42 points to 2,630.07.
Wall Street's fear gauge, the VIX, slipped 2.5% but remained above 35. Any reading above 30 signals investor worry.
French bond yields jumped to 3.4% after one expert suggested in an interview on Bloomberg Radio that France's credit rating could soon be downgraded. The euro also pared some gains following the remark, and European stocks turned mixed.
Cisco Systems shares rallied after the networking giant posted a fourth straight quarter of declining earnings late Wednesday, but reported more than 12% growth in its video and collaboration divisions.
Green Mountain Coffee Roasters 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.
Experts say, though, that the initial bounce is likely to be more of a technical move, rather than in response to improving sentiment.
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 increased more than imports. The number was less than the $45.9 billion U.S. expected.
The 10-year yield spiked to 2.05% from 1.96% late Wednesday, on substantially lower prices.
Treasury prices and yields move in opposite directions.
Oil for October delivery advanced $1.42 to $97.16 U.S. a barrel
Gold futures for December delivery fell $44.60 to 1,747 U.S. an ounce
