German upswing gives boost to tsx

The Toronto stock market closed higher Tuesday, partly because of reassuring data suggesting Germany will be able to avoid slipping into recession.

Traders also hoped for a resolution to the looming fiscal cliff, which will arise in early 2013 if automatic tax increases and steep spending cuts are allowed to take hold. The shock to the economy would probably push the U.S. back into recession.

The S&P/TSX composite index gained 51.89 points to 12,282.36, while the TSX Venture Exchange was off 2.81 points at 1,183.93. The Canadian dollar rose US0.08¢ to US101.4¢.

The Dow Jones industrials closed up 78.56 points to 13,248.44, while the Nasdaq rose 35.34 points to 3,022.3 and the S&P 500 index was up 9.29 points at 1,427.84.

Traders seemed unfazed by the latest back-and-forth charges from Republicans and Democrats that “serious” proposals for heading off the spending cuts and tax hikes haven’t materialized.

If anything, they were more optimistic after The Wall Street Journal reported that budget negotiations had “progressed steadily” in recent days.

“I’m at a point now where I think most of it will get resolved but there will be a bit ... that will be pushed into 2013,” said Sadiq Adatia, chief investment officer for Sun Life Global Investment, adding it’s a good thing that one party controls the Senate while another controls the House.

“This way, the Republicans want something, the Democrats want something and the only way to get it is for them to agree to help the other side.”

Investors took in an index of German investor optimism that rose more than expected in December. The ZEW indicator of economic sentiment rose to plus 6.9 points, from minus 15.7 in November. Germany’s economy grew a modest 0.2% in the third quarter. Tech stocks led TSX advancers as Re

search In Motion Ltd. jumped 68¢ or 5.79% to $12.42 after the BlackBerry maker said it has released the “gold” build of its developer tool kit. The build, the company says, contains all the final elements developers need to create apps from the coming BlackBerry 10 operating system, which is being unveiled at the end of January.

Patent-licensing firm Wi-LAN Inc. has started litigation against RIM alleging patent infringement of a patent related to Bluetooth technologies.

The consumer discretionary segment was higher as Canadian Tire Corp. rose $2.22 to $69.70, while home improvement chain Rona Inc. gained 47¢ to $11.37. The financials sector was ahead 0.65% with

Sun Life Financial up 63¢ to $27.96 and Scotiabank gained 56¢ to $56.50.

Canadian Press