Investors on Monday grew more comfortable with Europe's austerity backlash as the day wore on, leaving major North American indexes near break-even territory following rumblings of sharp losses earlier in the day.
The Dow Jones industrial average closed at 13,008.53, down 29.74 points or 0.2 per cent. The broader S&P 500 closed at 1,369.58, up 0.48 point or relatively unchanged on a percentage basis. In Canada, the S&P/TSX composite index closed at 11,860.66, down 10.57 points or 0.1 per cent.
The moves come on a slow day for U.S. economic news, but a big day for Europe: Weekend presidential elections in France turfed-out incumbent Nicolas Sarkozy in favour of Socialist François Hollande, raising questions about how the country will deal with pressure among most European countries to slash government spending. Meanwhile, parliamentary elections in Greece also handed defeat to parties that had backed austerity measures.
Early market moves had suggested investors were nervous from the outset, with major European indexes sliding into the red and U.S. futures activity predicting a similar reaction in North America.
However, the day was actually quite surprising for how tame it was. European bond yields barely budged, with the yield on France's 10-year government bonds actually falling by 3 basis points. Greece was an exception though: The yield on its 10-year government bond jumped to 21.9 per cent, up nearly 2 full percentage points. (As bond prices rise, yields fall.)
European stocks fared relatively well, too. France's CAC 40 rebounded, ending the day with a gain of 1.7 per cent. Germany's DAX index rose 0.1 per cent.
In North America, financials were among the top-performing areas of the market in both Canada and the United States. Bank of America Corp. rose 2.8 per cent and Toronto-Dominion Bank rose 0.6 per cent. In other gains, Walt Disney Co. rose 2.1 per cent after its Marvel's The Avengers posted record-breaking weekend ticket sales.
However, U.S. tech stocks were weak, with Microsoft Corp. down 1.1 per cent and IBM Corp. down 0.6 per cent.
In Canada, the benchmark index was weighed down by commodity producers. Barrick Gold Corp. and Goldcorp Inc. fell after the price of gold fell to $1,639.10 (U.S.) an ounce, down $6.10. Energy stocks were also weak after the price of crude oil continued its downward trend, falling to $97.94 a barrel, down 55 cents. Canadian Oil Sands Ltd. fell 1.4 per cent.