TSX closes lower as U.S. budget fears linger

Mon Dec 24, 2012 1:50pm EST
 

By Allison Martell

TORONTO (Reuters) - Canada's main stock index ended down after a quiet, shortened Christmas Eve trading session on Monday, as oil prices extended their retreat on worries about U.S. 'fiscal cliff' budget measures, pulling energy shares lower.

With U.S. lawmakers suspending talks on the spending cuts and tax increases that could send the economy back into recession until after Christmas, the market was cautious.

Rick Hutcheon, President and Chief Operating Officer at RKH Investments, said uncertainty around the U.S. fiscal cliff was weighing on the market.

"We have to get past the fiscal cliff. That's obviously a negative," he said.

World oil prices fell for a third straight session as the budget dispute threatened to hurt demand by the United States - the world's top oil consumer. Energy was the most influential negative sector, closing down 0.7 percent. <O/R>

There is no set date for budget talks to resume, and the two sides have only a few days between Christmas and January 1, when $600 billion in spending cuts and tax increases start to take effect. <MKTS/GLOB>

But Hutcheon also cautioned that markets were quiet: "There is very little volume - you can't read too much into the transactions that are occurring today."

"It's extremely quiet," said John Kinsey, Portfolio Manager at Caldwell Securities. "There's just nobody around."   Continued...

 
A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch