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At the open: Stocks struggle to squeak out gains

Traders work on the floor of the New York Stock Exchange.


North American stock markets are struggling to post gains at the open, with any advances in the major indexes feeling tentative and vulnerable to a pullback as investors fret over the U.S. fiscal cliff and Europe's debt crisis.

In the opening minutes of trading, the S&P/TSX index was down 43 points, or 0.3 per cent, at 12,091, led by a more than 1 per cent decline in the utilities sector. The S&P 500 was up 2 points, or 0.1 per cent, at 1,376; and the Dow Jones industrial average was up 9 points, or 0.07 per cent, at 12,765.

This morning's economic data from the U.S. didn't shift market sentiment very much. Retail sales fell 0.3 per cent in October from September, but Hurricane Sandy -- a one-time event -- probably was the reason why. U.S. producer prices fell 0.2 per cent, somewhat of a surprise given economists were expecting a monthly rise of 0.2 per cent. But traders aren't reading too much into it, given that they surged 1.1 per cent in September from the month before.

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Cisco helped buoy spirits late Tuesday by reporting better-than-expected quarterly results in an earnings season that has had its fair share of disappointments.

But the biggest focus for traders remains budget talks in the U.S. and efforts to avoid the more than $600-billion in spending cuts and tax increases that could kick in Jan. 1. President Barack Obama will hold a press conference later today and will meet with congressional leaders on Friday to begin those negotiations.

Reaching a deal isn't going to be easy. The Wall Street Journal and the Washington Post reported today that Mr. Obama plans to open talks by calling for $1.6-trillion in new tax revenue over the next decade, which is likely to be met with strong Republican opposition. The figure is double the amount proposed during failed closed-door talks with GOP leaders during debt negotiations in mid-2011.

Treasury Secretary Timothy Geithner said late Tuesday that Mr. Obama was "not prepared to extend upper-income tax cuts," an affront to Republican House Speaker John Boehner, who wants to increase revenue by limiting tax breaks, while leaving individual rates unchanged.

Asian markets firmed overnight but European stocks are weaker this morning. The euro zone debt crisis is continuing to keep traders there on edge, especially as millions of workers today joined strikes across southern Europe to protest against spending cuts and tax hikes.

Here's a look at some of the stocks moving on news today:

Rona Inc. shares are up more than 3 per cent after major shareholder Invesco Canada Ltd.said it's seeking to oust Rona's board.

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Facebook opened up 6 per cent. About 800 million Facebook Inc. shares are set to emerge from a post-initial public offering lockup today, potentially doubling the size of the company's share float.

Cisco Systems Inc. shares are up 7 per cent after reporting first-quarter results that beat estimates.

Loblaw Cos. said its third-quarter profit dropped 6 per cent, coming in just shy of analyst expectations. It also announced a 4.8 per cent hike in its dividend. Shares are up 2.7 per cent.

Teck Resources Ltd. announced it has hiked its dividend by 12.5 per cent. Shares are flat.

Staples Inc. reported a net loss of $596.3-million in its latest quarter but most of that was due to one-time charges and adjusted earnings were close to analyst expectations. Shares are up 4 per cent.

Abercrombie & Fitch Co. shares are up nearly 30 per cent after the clothing retailer's latest earnings blew past analyst expectations.

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Denison Mines Corp. announced a deal to acquire uranium explorer JNR Resources Inc. JNR shares surged 45 per cent at the open.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More


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