NEW YORK (CNNfn) - Brazil stocks finished a whisper higher on Tuesday in light trading after a better-than-expected sale of government notes offset concerns about the state of the U.S. economy.
Mexican stocks, however, finished 1.5 percent lower, following the Nasdaq down as investors worried over weak consumer confidence in the United States, Mexico's main trading partner.
Deepening pessimism in the overall North American economy led investors to flee Toronto stocks, as a gloomy outlook from the Bank of Canada and sharply lower U.S. consumer confidence data overshadowed solid profits in the Canadian banking sector.
Brazil ends up slightly
The benchmark Bovespa index finished 0.17 percent higher at 13,018.10, helped in part by a 2.4 percent rise by long-distance telephone operator Embratel that traders said was due to bargain hunting.
Turnover was $365 million – lower than the average of around $500 million.
The Brazilian real closed slightly firmer at 2.55 reals per U.S. dollar, up from Monday's 2.56, but off its opening rate of 2.55 Tuesday.
"The real continues to hover near 2.50, but it's important to note that volatility has declined, which is good," said Alejandro Vasarhelyi, head currency trader at ING Barings.
Brazil's financial markets have moved cautiously the past months given a raft of local and international concerns, including the slowing U.S. economy.
Stocks quickly fell after data showed that U.S. consumer confidence fell to its lowest level in four months. The health of the U.S. economy is key for Brazil, which depends heavily on its investment.
On Tuesday, many investors also sat on the sidelines waiting for details on the latest International Monetary Fund loan, announced last week, for Argentina. Market players are seeking clear signs the country would stave off a debt default and devaluation of its currency.
"The market continues depressed with no positive news coming out from within Brazil nor outside," said Luiz Marcos Prudencio, a trader at the Concordia brokerage in Sao Paulo. "This financial help for Argentina bought them time, but the structural problems continue."
The IMF said last week it would recommend an additional $8 billion in funds for cash-strapped Argentina, mired in a three-year recession and struggling to meet payments on $128 billion in debt.
Concern about the Argentine crisis has pushed Brazil's Bovespa down about 15 percent this year and the real currency is about 24 percent weaker against the dollar than in January.
IPC falls on U.S. economy worries
Mexico's IPC index of 36 leading stocks fell 97.24 points, or 1.52 percent, to close at 6,302.69 points.
"The U.S. consumer confidence data clearly had an impact on almost all the markets today," said Jorge Perez, director of market strategy at BBVA Bancomer in Mexico City.
The Conference Board, a private New York-based economic research firm, reported on Tuesday its U.S. consumer confidence index fell to 114.3 in August, below expectations for a rise to 117.0.
Nearly 90 percent of Mexico's exports go to the United States, tying the country's economic fortunes closely to its northern neighbor.
Leading media and telecom shares were among the top losers, hit by the Nasdaq's weakness, which weighs heavily on the Mexican market.
Shares of Mexico's No. 1 media group Televisa shed 2.4 percent to 17.10 pesos while its American depositary receipts (ADRs) slipped 2.5 percent to $37.45.
Televisa shares are down nearly 34 percent this year on concerns that a slowdown in the economy would take a bite out of profits at its flagship broadcasting unit.
Among the top percentage losers were shares of Mexican wireless operator Iusacell, off 3.66 percent to 3.95 pesos after Salomon Smith Barney cut its rating on the stock to "neutral" from "outperform" on concerns about the company's funding strategy.
Iusacell ADRs fell 3.63 percent to $4.25.
Volume on the Mexican bourse was light totaling 68.4 million shares, well below the daily average volume of 120 million shares.
Toronto also dips on economic pessimism
The Toronto Stock Exchange 300 composite index ended the day down 83.84 points, or 1.09 percent, at 7,578.40, reversing the gains made over the past two sessions. The index is down 15 percent on the year.
The market volume was a moderate 117.1 million shares worth C$2.4 billion (US$1.56 billion). Declining stocks beat advancers 617 to 423.
Toronto investors appeared to shrug off the Bank of Canada's widely expected rate cut of a quarter-percentage point, and instead focused on the central bank's warning that second-half growth would be below the economy's potential of 3 percent.
It also hinted further rate cuts could be necessary to pump up the sagging economy.
North American markets took another hit from a report that U.S. consumer confidence had dropped unexpectedly in August to its lowest level in four months, stoking fears that consumer spending might be losing steam.
In Toronto, banks stocks could barely lift their heads above the negative sentiment, even though both Bank of Nova Scotia, the No. 4 Canadian bank by assets and Bank of Montreal, the No. 5 bank by assets, posted better-than-expected profits.
Both banks dismissed speculation of a merger, an issue that has been a political hot potato in the past.
Scotiabank touched a 52-week high of C$50.10 in morning trade, but the stock ended the day down 45 Canadian cents at C$49.00. On Tuesday, Scotiabank posted earnings of C$554 million, or C$1.04 a share, up from C$548 million, or C$1.04 a share a year earlier. That beat analyst expectations of C$1 per share, according to estimates gathered by First Call.
After being down for most of the day, Bank of Montreal, ended 10 Canadian cents higher at C$42.75 on a strong earnings report.
-- from staff and wire reports 
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