Ottawa Citizen

Traders fear go­ing over the fis­cal cliff

- By Ma lcolM Mo rri­son

The Toronto stock mar­ket closed lit­tle changed Thurs­day as traders con­tin­ued to as­sess the chances of the United States go­ing over the so-called “fis­cal cliff.”

A dou­ble-whammy of tax in­creases and spend­ing cuts, which threaten to erode the al­ready weak U.S. econ­omy, is set to click in on Jan. 1.

The S&P/TSX com­pos­ite in­dex added 2.97 points to 12,373.77 while the TSX Ven­ture Ex­change gained 11.15 points to 1,196.75.

The Cana­dian dol­lar was off US0.36¢ to US100.51¢.

Mar­kets hit their worst lev­els of the ses­sion af­ter Se­nate Ma­jor­ity Leader Harry Reid said the U.S. government ap­pears headed over the fis­cal cliff be­cause of a lack of progress in ne­go­ti­a­tions be­tween Repub­li­cans who con­trol the House of Rep­re­sen­ta­tives and Democrats who con­trol the Se­nate and White House.

But in­dexes re­cov­ered most of the losses late in the day on word the House will be back in ses­sion Sun­day. It is un­clear what leg­is­la­tion the House might con­sider Sun­day, since Speaker John Boehner is in­sist­ing the Se­nate must make the next move.

“At the end of the day, this pre­vail­ing willthey-or-won’t they in Washington is caus­ing a dip,” said Craig Fehr, Cana­dian mar­kets spe­cial­ist at Ed­ward Jones in St. Louis.

“But it’s tough to read too much into any­thing given that vol­umes are ex­cep­tion­ally low. All the play­ers aren’t in the game so to speak.”

The Dow Jones in­dus­tri­als lost 18.28 points to 13,096.31, as data showed fis­cal cliff wor­ries are spread­ing to con­sumers.

The U.S. Con­fer­ence Board said its con­sumer con­fi­dence in­dex fell this month to 65.1, from 71.5 in Novem­ber, the sec­ond straight de­cline and the low­est level since Au­gust.

The sur­vey showed con­sumers were slightly more op­ti­mistic about cur­rent busi­ness con­di­tions and hir­ing, but their out­look for the next six months de­te­ri­o­rated to its low­est level since 2011

The Nas­daq com­pos­ite in­dex fell 4.25 points to 2,985.91 and the S&P 500 in­dex de­clined 1.73 points to 1,418.09.

Other data showed the av­er­age num­ber of Amer­i­cans seek­ing un­em­ploy­ment ben­e­fits over the past month fell last week to the low­est level since March 2008.

The U.S. Labour De­part­ment said Thurs­day that weekly ap­pli­ca­tions dropped 12,000 to a sea­son­ally ad­justed 350,000 in the week ended Dec. 22. The four-week av­er­age, a less volatile mea­sure, fell to a nearly five-year low of 356,750.

On the Toronto mar­ket, losses were led by a 0.5% de­cline in the fi­nan­cials sub­group as Sun Life Fi­nan­cial Inc moved down 26¢ to $26.35. Toronto-Do­min­ion

Bank de­clined 72¢ to $83.27.

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