Energy issues help keep Toronto markets in positive territory Tuesday morning, while another bout of bad economic news depressed U.S. stocks.

At midday, Toronto’s S&P/TSX composite was up 4.08 points or 0.05% to 8462.15 on volume of 77 million shares. It started the day about 20 points higher. The TSX Venture Exchange was up 3.25 points or 0.22% to 1511.13

On Wall Street, the Dow Jones industrial average was down 19.31 points or 0.19% at 10159.84. The Nasdaq dropped 14.38 points or 0.76% at 1877.71 while the Standard & Poor’s 500 index lost 1.63 points or 0.15% at 1104.99.

The Canadian dollar was up 0.57 of a cent from Friday’s close at US75.79¢.

U.S. oil prices hit fresh record highs above $44 a barrel on Tuesday after the head of the OPEC producers’ cartel said there was little the group could do to cool red-hot markets. U.S. light crude struck US$44.24 a barrel, the highest since crude futures were launched on the New York Mercantile Exchange in 1983. It was last holding firm just below US$44. London’s Brent crude followed suit, scoring US$40.45 a barrel, a level not seen since the run-up to the first Gulf War when it hit a record high of US$40.95.

The rise in oil prices has helped boost energy stocks 0.48% with Suncor Energy (up 1.62%) and Talisman Energy (up 0.95%) among the bigger gainers. Technology stocks were up 0.10% with Nortel Networks Corp., up 6.44%, leading the way. Financial stocks were off 0.06%, while golds wer flat.

Seven of the TSX index’s 13 subgroups were higher at midday.

On Wall Street, stocks were off their morning lows as investors digested another does of dour economic news. The Commerce Department reported Tuesday that consumers slashed their spending in June by the largest amount in three years as high energy prices took a toll on their wallets and made them more cautious buyers. Consumer spending dropped by a sharp 0.7 percent in June from the previous month. The retrenchment came after consumers splurged in May, ratcheting up spending by a strong 1 percent.

The latest snapshot of consumer spending was weaker than economists were expecting. They were forecasting a tiny 0.1 percent dip in spending and a 0.3 percent rise in incomes for June.
The 0.7 percent decline in spending was the first since September 2003 and the largest drop since September 2001.
Americans’ incomes rose by 0.2 percent in June, down from a solid 0.6 percent increase the month before.

The Commerce report followed a report on Monday that had already made markets gloomy. The outplacement firm Challenger, Gray & Christmas Inc. said layoffs in the U.S. rose 8% in July from the previous month, a report said on Monday, as the job market recovery struggled to gain momentum.

Analysts said that not only was the second quarter’s pace of economic growth much weaker than many people expected — the third quarter’s could be just as slow. For one thing, the second quarter ended on a slow note. In the month of June, job growth slowed, while both retail sales and industrial production actually fell.

“When you add uncertainties over terrorism, the elections and the stock market into the mix, business is unlikely to go on a hiring spree anytime soon,” oned U.S. commentator said. “This would nip in the bud the nascent improvement in consumer confidence, which appears to be based largely on improved job prospects. June’s so-called “soft patch” could well become this summer’s briar patch.”

Overseas, Tokyo’s Nikkei Stock Average of 225 issues dropped 81.67 points, or 0.73% to 11,140.57.

In Hong Kong, the key Hang Seng Index rose 1.55.73 points, or 1.27% to 12,357.12.

London’s FTSE 100 index edged up 11.3 points at 4,427.

Frankfurt’s DAX 30 rose 0.45% while the Paris CAC 40 was up 0.85%.