TSX falls on U.S. budget impasse

TOrON TO • The Toronto stock market closed lower Tuesday as economic worries associated with the U.S. budget crisis sent most sectors down.

The S&P/TSX composite index dropped 95.84 points to 12,692.41, led by sliding mining stocks.

The Canadian dollar fell US0.52¢ to US96.45¢ after data showed that housing starts came in at 193,637 units in September, up from 183,964 in August.

New York markets added to sharp declines chalked up Monday, with the Dow Jones industrial average racking up a second consecutive triple-digit decline, down 159.71 points to 14,776.53. Nasdaq was off 75.55 points at 3,694.83 and the S&P 500 index gave back 20.67 points to 1,655.45.

Until now, declines have been steady but there are signs this may be changing.

Short-term U.S. Treasury bill yields surged to levels not seen since 2008 in the midst of the financial crisis as investors worry about what happens if the debt ceiling is hit.

The gold sector led declines, down about 2.6% while the December bullion contract slipped US50¢ to US$1,324.60 an ounce. The base metals group fell 2.26% as December copper lost early gains and closed unchanged at US$3.29 a pound.

The energy component erased early gains to decline 1% as the November crude contract on the New York Mercantile Exchange rose US46¢ to US$103.49 a barrel.