Concerns about an upcoming vote in Cyprus over its plan to seize bank deposits sent North American stock markets lower Tuesday afternoon, as more uncertainty emerged over the outcome.
The S&P TSX index turned negative 7.89 points to end Tuesday at 12,773.87
The Canadian dollar sagged 0.51 cents to 97.38 cents U.S.
Meanwhile, the consumer discretionary index rose after Rona Inc. hired Robert Sawyer, a senior executive from the Metro grocery business, to be its next president and chief executive starting next month. The home renovation company’s shares were up 3.6%, or 38 cents, to $10.94.
Utilities prospered, too, as Just Energy surged 3.3% to $7.15.
Gold stocks were ahead as Rubicon Minerals hiked nearly 4% to $2.63. Pretium Resources shot up 2.9% to $8.23.
Shares in convenience store owner Couche-Tard were down after it reported profits rose to $142.5 million, or 75 cents a share, from $86.8 million, or 48 cents, a year earlier. The stock fell 1.8%, or $1.02, to $54.57.
Lululemon shares took a hit after the company said it has yanked its popular black yoga pants from store shelves because the material was too sheer. The company warned of lower than expected sales because of a shortage of the extraordinarily popular clothing items, which make up make up about 17 per cent of all women’s pants and crop pants in its stores.
Shares fell 3.2%, or $2.15, to $65.35.
Metals and mining stocks took it on the chin, with Teck Resources dropping $1.59, or 5.3%, to $28.26. Also faltering were global base metals, mostly on the shoulders of Taseko Mines, down 13 cents, or 4.4%, to $2.84.
A speaker of Cyprus’ house said a parliamentary vote to put hefty taxes on bank accounts to help with the country’s bailout will go ahead as planned, despite a request by the governing party for a delay.
But reports have suggested that the finance minister of the small Mediterranean island wants to resign. A conflicting report from local media says Michalis Sarris has resigned from his position as finance minister, while CNBC said that Cyprus president Nicos Anastasiades has not accepted the resignation.
The uncertainty erased any gains made earlier in the session.
If the vote fails to get through the Cypriot parliament, it could shake confidence in the euro — Europe’s main currency.
Speaking of things economic in this country, Statistics Canada reported this morning that manufacturing sales edged down 0.2% in January to $48 billion, the fourth downward month in five.
The nation’s number crunchers also told us that wholesale sales rose by 0.3% in January to $49 billion, mostly due to higher computer and communications equipment sales.
ON BAYSTREET
The TSX Venture Exchange turned lower 5.27 points to 1,106.51
By the closing bell, eight of the 14 Toronto subgroups were negative, weighed mostly by metals and mining issues, slumping 3.5%, global base metals, down 2.5%, and energy, down 0.6%.
The half-dozen gainers were led upwards by consumer discretionaries, up 0.6%, utilities, ahead 0.4%, and gold, gaining 0.3%.
ON WALLSTREET
U.S. stocks remained mixed Tuesday afternoon, after lawmakers in Cyprus voted against a tax on bank deposits, throwing into doubt a €10-billion euro bailout agreed with the European Union just three days ago.
The Dow Jones Industrials recovered 3.76 points just before the bell to 14,445.80.
The S&P 500 index was 3.62 points lower to 1,548.48. The tech-heavy NASDAQ Composite moved down 8.50 points to 3,229.09.
All three major indexes are still between 7% to 10% higher for the year so far, fueled by ongoing stimulus from the Federal Reserve and signs that the economy is well on its way to a full recovery.
In corporate news, shares of Canadian athletic apparel maker Lululemon Athletica slid after the company announced a recall of yoga pants that were unintentionally see-through.
Shoe retailer DSW missed revenue forecasts and issued cautious guidance about sales, prompting the company's stock to fall.
Electronic Arts Inc shares declined after the company announced its chief executive was resigning. EA also said its revenue and earnings would be at the low end or below its January guidance.
Shares of Walgreen rose 5% after the company and Alliance Boots, in which Walgreen bought a stake last year, agreed to a 10-year partnership with pharmaceutical distributor AmerisourceBergen.
Shares of rival distributor Cardinal Health, whose own contract with Walgreen expires later this year, declined on the news.
Economically speaking, investors were encouraged by a report from the U.S. Census Bureau that showed housing starts rose 0.8% in February, while building permits jumped 4.6%.
Shares of homebuilders Lennar ,Toll Brothers and Hovnanian gained ground.
Despite the good news at home, investors continued to keep a wary eye on Cyprus. The heavily indebted nation has been in the spotlight since the weekend, as the European Union has been trying to impose a one-time tax on bank deposits as part of a €10-billion bailout package.
Lawmakers in Cyprus are scheduled to vote later Tuesday on the controversial measure.
Prices on the 10-year U.S. Treasury enjoyed gains, lowering yields to 1.91% from Monday’s 1.96%. Treasury prices and yields move in opposite directions.
Oil prices retreated $1.55 to $92.19 U.S. a barrel.
Gold prices recovered $6.10 to $1,610.70 U.S. an ounce.
