The Toronto stock market was slightly higher Thursday as resource stocks rose alongside prices for oil and metals.
The S&P/TSX composite index was well off session highs by mid-afternoon, gaining 21.53 points to 12,233.95 following three days of losses. Markets have been depressed by fresh signs of a slowing economic recovery, including another downward revision of global growth by the International Monetary Fund and forecasts of lower demand by resource giant Alcoa Inc. The TSX Venture Exchange was 2.21 points lower at 1,299.94.
Commodity prices also supported the Canadian dollar, which was up 0.21¢ at US 102.18¢.
New York markets were also off the best levels of the day with the Dow Jones industrials down 18.58 points to 13,326.39 on top of two back-to-back, triple-digit slides. The Nasdaq composite index slipped 2.4 points to 3,049.38 while the S&P 500 index ticked up 0.28 of a point at 1,432.84.
Indexes had earlier been well into positive territory as a much better than expected read on U.S. jobless insurance claims raised hiring prospects. Traders also looked ahead to key earnings reports Friday from U.S. banking giants, including JPMorgan Chase and Wells Fargo.
The U.S. Labor Department said the number of people seeking unemployment aid plummeted last week by 30,000 to a seasonally adjusted 339,000, the lowest level in more than four years. The four-week average, a less volatile measure, dropped by 11,500 to 364,000, a six-month low.
Traders appeared to take in stride a move by Standard & Poor's to cut its rating on Spain's debt by two notches to BBB-minus, leaving the country on the verge of non-investment grade, or junk, status.
The Spanish government has so far refused to tap a new European Central Bank bond-buying facility that has been largely designed to keep a lid on the country's borrowing rates. But some analysts think the downgrade will help push the government to finally request the help.
Even so, others think traders are in danger of letting their guard down.
"We probably don't focus enough on Europe. I still think it's simmering and could blow up in our face," said Jim Muir, director at Fraser Mackenzie.
"But we're all growing very complacent with the problems over there. One day we'll wake up and there could very well be another Lehman Brothers moment happen there. But history shows we do work our way through these problems."
Earnings expectations are low for the third quarter as the debt crisis continues to take a toll on the economies in Europe.
