TORONTO - A mixture of both positive and negative economic news left investors cautious on Tuesday as they weighed the latest U.S. government plan to aid consumer lending companies.
Toronto's S&P/TSX composite index rose 1.99 points to 8,442.86 as oil prices declined.
The energy sector was behind 1.2 per cent as the near-month crude oil contract slipped $3.73 to close at US$50.77 per barrel on the New York Mercantile Exchange.
The Canadian dollar rose 0.63 cents to 81.63 cents US after surging 2.7 cents Monday.
In New York, the Dow Jones industrial average rose 36.08 points to 8,479.47 despite a flood of U.S. economic data that appeared to confirm worsening conditions. The Nasdaq composite was down 7.29 at 1,465 and the S&P 500 moved 5.58 points higher to 857.
Investors reacted to an announcement that the Federal Reserve will purchase up to $100 billion in direct mortgage obligations and another $500 billion in mortgage-backed securities. The Fed also unveiled a new program to help unfreeze the market that backs consumer debt such as credit cards, auto loans and student loans.
TSX financial stocks rose 0.48 per cent after Bank of Montreal reported fourth-quarter results with no credit-market booby-traps and net income of $560 million, up 24 per cent from a year ago. BMO shares gained 83 cents to $34.95.
The gold sector was down 0.7 per cent, as the bullion contract fell $1 to US$818.50 an ounce, a decline that was eased somewhat by the sliding value of the greenback.
The information technology sector was the greatest decliner, falling 2.9 per cent, as Research In Motion lost $4.50 to $50.77.
The TSX Venture Exchange fell 2.83 to 719.96.
Shares in Denison Mines Corp. (TSX:DML), a mid-sized uranium producer and explorer, fell 24 per cent to $1.02 after the company and its partners said they are postponing development of a uranium project in Saskatchewan because of weak economic conditions.
Meanwhile, the U.S. Commerce Department reported the U.S. economy shrank at a 0.5 per cent annualized rate in the July-September quarter, as American consumers throttled back their spending by the most in 28 years.
And more bad news on the housing front came from the widely watched Standard & Poor's/Case-Shiller U.S. home price index. Prices tumbled at a record 16.6 per cent annualized rate, to levels not seen since the first quarter of 2004.
"It's this deflationary mindset that's gripping the markets right now," said Paul Vaillancourt, director of asset allocation at Franklin Templeton Managed Solutions in Calgary.
"Clearly we are in a bottoming process, but we haven't bounced back up. We need some time to pass -- maybe the Christmas holidays. As time passes we come back into the new year with a more positive attitude and mindset."
"People are hanging on, they want some good news, but increasingly that's becoming more and more difficult."
But, investors got some good news about U.S. consumers.
The Conference Board said its Consumer Confidence Index unexpectedly rose to 44.9 in November, up from a revised 38.8 in the previous month, which was its lowest reading since the research group started tracking the index in 1967. Economists expected the index to slip to 37.9. However, the business research group said Americans' views on the economy still remain the gloomiest in decades.
In Canadian corporate news, the children of Canwest Global Communications Corp. founder Izzy Asper have expanded their holdings of the media company's subordinate voting shares. Leonard and David Asper said recent purchases of 4.5 million of the beaten-down subordinated shares were "for investment purposes." Canwest shares were down eight cents to 61 cents.
Shares of Protox Therapeutics Inc., a Vancouver-based drug developer, rose more than 33 per cent after the company said it has received positive data from its Phase 2 study of a key drug for benign prostatic hyperplasia, a painful urological ailment. The company was up 11 cents to 44 cents.
BHP Billiton Ltd. abandoned its hostile takeover bid for rival Rio Tinto Ltd., blaming the global economic downturn and plunging commodity prices. Rio's holdings include the former Alcan, which is now a wholly owned subsidiary of the Anglo-Australian mining company.
