December 24, 2012 / 4:23 PM / 6 years ago

CANADA STOCKS-TSX drops with oil as US budget fears maintain grip

* TSX down 33.55 points, or 0.27 percent, at 12,352.15
    * Index weighed down by energy, materials sectors

    By Allison Martell
    TORONTO, Dec 24 (Reuters) - Canada's main stock index edged
lower in quiet Christmas Eve trading on Monday as oil prices
extended their retreat on worries about U.S. 'fiscal cliff'
budget measures, pulling down energy shares. 
    With U.S. lawmakers suspending talks until after Christmas
on avoiding the spending cuts and tax increases that could send
the economy back into recession, the market was cautious.
Trading volume was light ahead of an early close. 
    "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've been through this before, and they usually just
kick the can down the road," he said. "Something's going to get
down, not probably what I would like to see, but something is
always done."
    There is no set date for 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 effect.
    At 10:53 a.m. (1553 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 33.55 points, or 0.27
percent, at 12,352.15.
    Trading volumes are expected to remain low, with both
Canadian and U.S. equity markets scheduled to close at 1 p.m.
(1800 GMT) ahead of Tuesday's Christmas holiday. Canadian
markets will remain closed through Wednesday, Boxing Day.
    Energy shares fell 0.7 percent, as oil fell for a third day,
and financials edged down 0.2 percent. 
    The materials sector was down 0.5 percent as copper edged
lower. The Thomson Reuters-Jefferies CRB Index, which
tracks commodity prices, was down 0.28 percent. 
    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 1.8 percent to
    Sears Canada Inc fell 0.7 percent to C$10.59 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. 
    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 were up 1.4 percent at C$40.48.
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