TORONTO - The Toronto stock market gave up early gains Thursday as mining stocks turned negative even as global economic concerns faded a little with reports of new leadership for debt-plagued countries Italy and Greece.
The S&P/TSX composite index came off a 104-point advance to fall 15.28 points to 12,140.94 while the TSX Venture Exchange rose 3.79 points to 1,624.79.
The Canadian dollar was off the highs of the morning but still up 0.03 of a cent to 97.91 cents US.
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 US$2.6-trillion 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.
U.S. markets were also down from earlier levels with the Dow Jones industrial average up 76.9 points to 11,857.84, the Nasdaq composite index was down 3.38 points to 2,618.27 while the S&P 500 index climbed 5.86 points to 1,234.96.
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.
The yields on Italy's benchmark 10-year bond surged well above the seven per cent threshold Wednesday, a level many economists view as unsustainable. Yields rise as bond prices fall.
On Thursday, the 10-year bond yield fell 11 basis points to 7.02 per cent, according to FactSet Research.
Tensions also eased on the news that Italy easily sold C5 billion in 12-month bonds at borrowing rates which were not as bad as expected. Investors asked for an interest rate of 6.087 per cent to lend Italy 12-month money.
Though that's up sharply from 3.57 per cent in the previous such auction last month but well below analyst expectations of seven per cent.
Italy also reportedly plans to approve economic legislation by Sunday.
Meanwhile, Papademos' appointment as the new Greek PM came after four days of intense talks to form a coalition government. The interim government aims to approve a new C130 billion financial aid deal.
Oil prices recovered from sharp price drops Wednesday on worries that a worsening European debt crisis will push the region into recession and derail a fragile global economic recovery. A worsening of economic conditions would slash demand for oil and metals, which support higher stock prices on the resource-heavy TSX.
The December crude contract on the New York Mercantile Exchange gained $1.14 to US$96.88 a barrel and the TSX energy sector gained 0.59 per cent. Suncor Energy (TSX:SU) gained 25 cents to $31.69 and Cenovus Energy (TSX:CVE) improved by 25 cents to $33.38.
The financials sector also made headway, up 0.37 per cent with Scotiabank (TSX:BNS) ahead 37 cents to $51.70.
However, metal prices headed lower with the December copper contract down eight cents to US$3.36 a pound on top of a nine-cent slide Wednesday. The TSX mining sector was off 1.07 per cent as Teck Resources (TSX:TCK.B) was up 33 cents to $38.06 while First Quantum Minerals (TSX:FM) shed 61 cents to $19.15.
The gold sector was down 0.84 per cent as bullion prices also declined as the December contract fell $33.20 to $1,758.40 an ounce. Kinross Gold Corp. (TSX:K) was down 11 cents to $14.29.
European markets also weakened on top of steep losses on Wednesday as London's FTSE 100 index slipped 0.18 per cent, Frankfurt's DAX gained 0.47 per cent and the Paris CAC 40 was down 0.63 per cent.
Earlier in Asia, Japan's Nikkei 225 index fell 2.9 per cent while Hong Kong's Hang Seng dived 5.3 per cent.
It was another busy day for earnings reports.
Copper producer Quadra FNX Mining Ltd. (TSX:QUX) reported it earned nearly US$142.8 million or 75 cents a share in the three months ended Sept. 30. That compared with earnings of $19.5 million or 10 cents last year. Revenues rose to $326.2 million from $259.2 million as the company benefited from higher metals production. Its shares slipped one cent $10.85.
Shares in coffee store operator Tim Hortons Inc. (TSX:THI) rose 32 cents to $49.86 as it said profits soared 40 per cent in the third quarter to $103.6 million. Revenues totalled $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 per cent in Canada and 6.3 per cent in the United States.
Tissue and cardboard maker Cascades Inc. (TSX:CAS) 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 per cent 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. (TSX:TKO), had a $30-million profit 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.
Cisco Systems Inc., the world's largest maker of computer networking gear, is showing signs of pulling a turnaround, exceeding analyst sales expectations for the second quarter in a row. Cisco posted net income of US$1.8 billion, which compares with $1.9 billion a year ago.
Revenue grew nearly five per cent from last year to $11.3 billion and Cisco shares climbed $1.24 to US$18.85.
