Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Equities
In the U.S., the Dow Jones Industrial Average fell 105.09 points, or 0.31n per cent, at the open to 33,974.09.and Ukraine and the threat of sanctions by western nations.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 52.57 points, or 0.25 per cent, at 20,955.63.
In the U.S., the Dow Jones Industrial Average fell 105.09 points, or 0.31 per cent, at the open to 33,974.09.
The S&P 500 opened lower by 16.13 points, or 0.37 per cent, at 4,332.74, while the Nasdaq Composite dropped 123.71 points, or 0.91 per cent, to 13,424.36 at the opening bell.
Sentiment remained under pressure after Russian president recognized the independence of two separatist regions in southeastern Ukraine and sent Russian troops into the breakaway areas. The Globe’s Mark MacKinnon reports that Mr. Putin made the announcement and signed the recognition documents at the end of a 40-minute televised address on Monday, most of which was delivered in anger, lamenting the end of the Soviet Union and the loss of territories such as Ukraine that once were part of the Russian empire.
Early Tuesday, Germany took steps to halt the process of certifying the Nord Stream 2 gas pipeline from Russia, Chancellor Olaf Scholz said, as the West started taking punitive measures against Moscow over the Ukraine crisis.
“The latest turn of events narrow the chances of a Russian pullback, and the window for diplomacy is almost shut,” Swissquote senior analyst Ipek Ozkardeskaya said in an early note.
“The risk off mode will likely stay on for the coming hours, but at this point it’s hard to predict what’s next. Any positive news could reverse the bearish action and lead to sudden jumps in risk asset prices, yet a further escalation of tensions, which now became the base case scenario, should further enhance gains in energy, safe haven assets and gold,” she said.
In this country, bank earnings will dominate later in the week.
Royal Bank kicks off first-quarter results on Thursday. CIBC and National Bank report first-quarter results on Friday while the rest of the country’s biggest lenders follow suit next week. Across the sector, analysts are expecting to see more modest profit growth while dividend hikes will likely have to wait.
On Wall Street, Home Depot Inc topped quarterly same-store sales estimates. Same-store sales at the retail chain rose 8.1 per cent in the fourth quarter ended Jan. 30, compared with analysts’ estimates of a 4.9-per-cent rise, according to IBES data from Refinitiv. However, Home Depot also reported a decline in gross profit margins for the holiday quarter as a result of higher costs.
Overseas, the pan-European STOXX 600 was little changed by midday. Britain’s FTSE 100 edged up 0.24 per cent. Germany’s DAX slid 0.24 per cent while France’s CAC 40 dipped 0.05 per cent
In Asia, Japan’s Nikkei fell 1.71 per cent. Hong Kong’s Hang Seng sand 2.69 per cent.
Commodities
Crude prices hit multiyear highs in early going as tensions between Russia and Ukraine continue to raise supply concerns.
The day range on Brent is US$96.48 to US$99.50. The range on West Texas Intermediate is US$93.45 to US$96.00. In the predawn period, Brent was up about 4 per cent while WTI rose nearly 5 per cent.
Both benchmarks touched their highest levels since 2014 on concern over the situation in Europe.
“Short of the U.S. and Europe throwing the Ukraine under the political bus and appeasing Putin in totality, it seems inevitable that Brent crude will test US$100 a barrel sooner rather than later,” OANDA senior analyst Jeffrey Halley said.
“A full-scale Russian invasion likely will see it spike to US$130 (at least) dragging WTI with it. It is hard to see Brent moving back below US$90 a barrel anytime soon now, with OPEC+ capacity limited in its ability to pump more, and Iranian crude frozen out of the market.”
Gold prices, meanwhile, hit a nine-month high as the Ukrainian crisis deepened.
Spot gold was up 0.2 per cent at US$1,909.33 per ounce, after scaling its highest since June 1 at US$1,913.89 per ounce earlier. U.S. gold futures gained 0.7 per cent to US$1,913.80.
“With the situation deteriorating seemingly by the day in Eastern Europe, there is very little reason to be negative on gold at the moment,” Mr. Halley said.
Currencies
The Canadian dollar was relatively steady while its U.S. counterpart held near a one-month high against world currencies as geopolitical risk injects increased volatility into markets.
The day range on the loonie is 78.31 US cents to 78.56 US cents.
There were no major Canadian economic releases on Tuesday’s calendar.
Events in Eastern Europe continue to dominate market sentiment globally.
“The short-term market reaction will depend on the extent of sanctions imposed by the West,” Elsa Lignos, global head of FX strategy for RBC, said in a note.
“Western leaders have two options – a ‘modest’ approach, trying to signal de-escalation (what markets ‘want’ to see) or a firmer approach, recognizing that allowing Putin to dismantle Ukraine piece by piece will still achieve his end goal, over a longer timeframe. The day ahead should show which path we are heading down.”
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, edged 0.1 per cent lower at 96.013 against a basket of currencies including the euro, as investors await further developments in the crisis.
The euro rose 0.2 per cent higher versus the dollar to US$1.1331 by early Tuesday morning, after touching an eight-day low, according to figures from Reuters.
Safe-haven currencies, meanwhile, strengthened.
The yen advanced about 0.1 per cent to 114.8 after briefly touching 114.50 to the U. S. dollar, while the Swiss franc slipped 0.4 per cent versus the euro at 1.039, after hitting one-month high of 1.0339 versus the euro.
In bonds, the yield on the U.S. 10-year note was down slightly at 1.915 per cent in the predawn period.
More company news
Centerra Gold Inc. has signed a deal to buy Gemfield Resources LLC and its Goldfield District Project in Nevada. Under the deal with Waterton Nevada Splitter LLC, Centerra will pay a total of US$206.5 million including US$175 million in cash at closing plus a US$31.5-million future milestone payment payable in cash or Centerra shares. The Toronto-based gold miner says Goldfield is a conventional open-pit, heap leach project in late-stage development.
Economic news
(9 a.m. ET) U.S. Case-Shiller Home Price Index (20 city) for December.
(9 a.m. ET) U.S. FHFA House Price Index for December.
(9:45 a.m. ET) U.S. Markit PMIs for February.
With Reuters and The Canadian Press