The relatively better showing in Canada than elsewhere reflected higher energy prices.Larry MacDougal for The Globe and Mail
Toronto stocks traded little changed around mid-session Tuesday, as strength in oil producers and a slight upturn for life insurers helped the Canadian market buck the global trend to lower share prices.
The TSX S&P composite was down 24 points or .21 per cent to 11,521 in recent trading.
Stocks in U.S. and Europe posted larger losses, with the Dow Jones Industrial Average off 134 points or 1 per cent, driven by weaker earnings and worries over slowing growth.
Losses in North America were modest compared to some of the action in Europe, where Spain once again led decliners with a plunge of 3.6 per cent, followed by Italian stocks, which were down 2.7 per cent.
The relatively better showing in Canada than elsewhere reflected higher energy prices. Oil rose 50 cents to $88.64 (U.S.) a barrel and the prospects for more takeovers in the sector following China's blockbuster buster bid for Nexen.
"Nobody thinks that Suncor is going to get taken over or Canadian Natural Resources is going to get taken over but pretty much all of the smaller companies are now seen as fair game," says David Baskin, president of Baskin Financial Services Inc., a boutique money manager based in Toronto.
Among the larger gains in Toronto, Rogers Communications surged 5.3 per cent on better earnings.
In New York, Dow component and technology bellwether Cisco Systems tumbled 5.1 per cent after announcing it was cutting 1,300 jobs, or 2 per cent of its workforce.
UPS fell 5.1 per cent, as investors reacted with disappointment to the delivery giant's reduced guidance for the year amid slowing economic growth.
Mr. Baskin said he believes many stocks are priced at bargain levels and "really inexpensive compared to bonds," suggesting that markets could soon rally.
Safe government of Canada bonds or U.S. Treasuries with 10 year maturities currently yield about 1.5 per cent, but Mr. Baskin said many domestic banks, utilities, telecommunication companies and pipelines offer dividend yields of 4 per cent.
"It baffles us that people are prepared to lend any government money for 10 years at 1.5 per cent and have inflation at 2 per cent and then pay taxes," he said.
Accounting for differing tax treatments, the yield on stocks is currently about four times that of 10 year government bonds. "That's unprecendented," he said.
In other markets, gold fell $2 to $1574.70 an ounce.