TORONTO ? The Toronto stock market racked up more losses Friday as traders played it cautious while U.S. President Barack Obama and top congressional leaders got together to discuss a resolution to a looming fiscal crisis that has the potential to seriously disrupt the American economy.
The S&P/TSX composite index drifted 21.26 points lower to 11,790.12 while the TSX Venture Exchange added 5.73 points to 1,228.43.
The Canadian dollar slipped 0.18 of a cent to 99.69 cents US.
U.S. markets also extended a string of losses with the Dow Jones industrials down 46.11 points to 12,496.27, the Nasdaq off 17.3 points at 2,819.63 and the S&P 500 index down 7.19 points at 1,346.14.
North American markets have nosedived over the last seven sessions as the results of the U.S. election deepened pessimism that politicians can avoid a ?fiscal cliff? ? a series of tax hikes and spending cuts set to take effect at the start of 2013.
Some economists estimate that if the current automatic changes aren?t changed, about five percentage points will be cut from U.S. growth ? plunging the world?s largest economy into recession and damaging an already fragile global economy.
The TSX has tumbled 4.5% since the election as worries about a sudden slowing of economic growth would be bad news for a resource heavy market like Toronto?s, since a lessening of demand for oil and metals would put pressure on mining and energy stocks.
The Dow industrials has fallen 5.3% as investors worry about higher dividend and capital gains taxes.
Obama has been firm that taxes are going up on upper-bracket earners. But House speaker John Boehner and Senate minority leader Mitch McConnell are adamant that his campaign promise of raising the top income tax rate on family income exceeding $250,000 a year is a non-starter.
The U.S. Senate is dominated by the Democrats while the House of Representatives is controlled by the Republican party, whose candidate Mitt Romney was defeated last week by Obama in the Nov. 6 presidential election.
Obama will press the leaders to make sure that taxes don?t go up on 98% of American families and 97% of small businesses at the end of the year.
Traders also took in data showing that superstorm Sandy depressed U.S. industrial output in October.
The Federal Reserve says industrial output fell 0.4% last month, after a 0.2% gain in September. Excluding the storm?s impact, production at U.S. factories, mines and utilities would have been up about 0.6%.
Base metal stocks led decliners as December copper fell two cents to US$3.44 a pound. Turquoise Hill Resources dropped 20 cents to C$7.40 while First Quantum Minerals slipped 21 cents to $20.93.
The consumer staples sector declined 0.4% as grocer Loblaw Cos. gave back 45 cents to $32.97.
The TSX energy sector drifted 0.26% lower even as December crude on the New York Mercantile Exchange moved up $1.50 to US$86.95 a barrel as investors monitored fighting between Israel and militants in Gaza and its potential impact on supplies. Suncor Energy declined 22 cents to C$31.46 and Canadian Natural Resources shed 20 cents to $27.17.
The gold sector was slightly lower as December bullion moved down $1.50 to US$1,712.30 an ounce. Goldcorp Inc. was down 26 cents to C$39.66 and Iamgold faded 27 cents to $11.54.
On the corporate front, trading in shares of Astral Media Inc. was halted Friday after a report that BCE Inc. was planning to make a new takeover offer for the broadcasting and advertising company. The CRTC killed a $3.4-billion deal last month, saying it wasn?t in the best interests of Canadians. Reports say the new deal seeks to overcome regulatory opposition with a plan to auction off a number of Astral?s English broadcast assets. BCE shares were ahead 36 cents at $41.74.
And Hostess Brands says it is going out of business, closing plants that make Twinkies and Wonder Bread for the U.S. market and laying off all of its 18,500 workers. The company says a nationwide worker strike crippled its ability to make and deliver its products at several locations.
Hostess had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn?t return to normal levels by Thursday evening.
European bourses also continued to lose ground as London?s FTSE 100 declined 0.99%, Frankfurt?s DAX fell 0.77% and the Paris CAC 40 stepped back 0.8%.
Trading in Asia was mixed as Japan?s Nikkei 225 stock index jumped 2.2%, Hong Kong?s Hang Seng rose 0.2% but South Korea?s Kospi fell 0.5%.
Benchmarks in China fell, with the Shanghai Composite Index closing 0.8% lower while the Shenzhen Composite Index was down 0.7%.
Source: http://business.financialpost.com/2012/11/16/tsx-piles-on-losses-as-markets-focus-on-fiscal-cliff/
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