TSX DROPS LOWER AS DOW RISES
North American markets diverged on Monday as the Toronto Stock Exchange moved lower on widespread weakness across major sectors while Wall Street got a boost on encouraging signs from talks to resolve the “fiscal cliff ” stalemate in Washington.
The S&P/TSX composite index fell 15.37 points to close at 12,281.35, while the TSX Venture Exchange inched ahead 1.37 points to 1,184.99.
The Canadian dollar was up 0.29¢ to US101.66¢.
TSX energy stocks were down 0.2% as the January crude contract on the New York Mercantile Exchange rose 47¢ to close at US$87.20 a barrel.
March copper declined 1.7¢ to US$3.67 a pound while February gold bullion lifted $1.20 to US$1,697.00 an ounce.
House of Representatives Speaker John Boehner reportedly told President Barack Obama on the weekend that he could be flexible on raising taxes on some wealthy earners in exchange for cuts to benefit programs cherished by Democrats. The speaker and the president met at the White House on Monday to discuss the pending fiscal cliff and deficit reduction.
On Wall Street, the Dow Jones industrials gained 100.38 points to end at 13,235.39 and the Nasdaq rose 39.27 points to 3,010.60. The S&P 500 index was up 16.78 points at 1,430.36.
If congressional Republicans and the White House can’t reach a deal by Jan. 1, tax cuts enacted a decade ago for all Americans will expire and government programs will be cut across the board. The combination could lead to a U.S. recession that could spread to other economies of the world.
“Any possibility of a resolution probably gives you a little green. If somebody comes up and says, ’We haven’t really progressed much,’ we’ll see it going the other way,” said Adrian Mastracci, the portfolio manager of KCM Wealth Management in Vancouver.
“As far as investing goes, we have to get past that.”
Meanwhile, a survey of top U.S. business economists released Monday by the National Association for Business Economics showed that most believe that modest growth will be ongoing in 2013, led by rising demand for housing.
Based on the survey, NABE sees economic growth of 2.1% after 2.2% growth in 2012.
In Canada, the real-estate industry’s main association released a revised forecast for 2012 housing resales. The Canadian Real Estate Association now projects 456,300 units will be sold in 2012, half a percentage point below last year’s level. The Canadian national average home price is projected to rise by 0.3% to $363,900 in 2012, down from CREA’s September forecast of $365,000, up 0.6%.