CANADA STOCKS-TSX closes lower as U.S. budget fears linger

Mon Dec 24, 2012 1:44pm EST
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* TSX closes down 14.90 points, or 0.12 percent, at
    * Index weighed down by energy, materials sectors

    By Allison Martell
    TORONTO, Dec 24 (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
    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. 
    There is no set date for budget talks to resume, and the two
sides have only a few days between Christmas and Jan. 1, when
$600 billion in spending cuts and tax increases start to take
    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."
    Kinsey, like most political experts and economists, expects
a U.S. budget deal of some sort will come after Christmas.
    "They have been through this before and they usually just
kick the can down the road," he added. "Something's going to get
down, not probably what I would like to see, but something is
always done."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 0.12 percent, or 14.90 points, at
    Canadian and U.S. equity markets closed early, shutting at 1
p.m. EST (1800 GMT) ahead of Tuesday's Christmas holiday.
Canadian markets will remain closed through Wednesday's Boxing
Day holiday.
    Financial stocks closed little changed, up 0.03 percent. The
materials sector edged down 0.13 percent as copper slipped. The
Thomson Reuters-Jefferies CRB Index, which tracks
commodity prices, was down 0.35 percent. 
    Canada Life, a unit of insurer Great-West Lifeco Inc
, is close to a deal for state-rescued insurer Irish
Life, a source familiar with the talks said on Sunday. On
Monday, Great-West rose 0.5 percent to C$24.30. 
    Chevron Corp's Canadian unit said it would buy a 50
percent stake in the Kitimat liquefied natural gas project and
the proposed Pacific Trail Pipeline from EOG Resources Inc
 and Encana Corp. Encana fell 2.3 percent to
    After Friday's close, SNC-Lavalin Group Inc said a
client had given notice that it would terminate an engineering,
procurement and construction contract. But SNC said it did not
anticipate a material impact on fourth-quarter earnings. Its
shares closed up 0.8 percent at C$40.21. 
    Outside the index, Sears Canada Inc rose 1.6
percent to C$10.83 after it said its chief financial officer
would resign effective Jan. 4. The company, majority-owned by
Sears Holdings Corp is pushing for a turnaround after
several quarters of precipitous declines in same-store sales.