Fiscal cliff fears stall markets

The Toronto stock market closed little changed Monday with buyers content to sit on the sidelines amid skepticism that an agreement can be reached to avoid the U.S. falling over the so-called fiscal cliff at the end of the year. The S&P/TSX composite index was 5.34 points lower to 12,191.46 while the TSX Venture Exchange gained 4.54 points to 1,305.46.

The Canadian dollar wasn’t trading in Canada on Monday as banks were closed in observance of Remembrance Day.

U.S. markets were also lacklustre as the Dow Jones industrials dipped 0.23 of a point to 12,815.16, the Nasdaq was off 0.62 of a point to 2,904.25 while the S&P 500 index was ahead 0.15 of a point at 1,380.

The fiscal cliff label refers to a string of tax increases and steep spending cuts aimed at reducing the U.S. deficit that is set to automatically kick in at the first of the year. If it is allowed to take full effect, the cuts and tax increases will total at least half a trillion dollars and take a big chunk out of GDP in 2013. Failure to come up with a compromise would likely tip the U.S. back into recession and drag down other economies with it. The December copper contract in New York closed two cents higher at $3.47 a pound. December crude on the New York Mercantile Exchange was down 50 cents to $85.57 a barrel, and the energy sector was down 0.42 per cent. The gold sector was off 1.3 per cent as December bullion ended the session unchanged at $1,730.90 an ounce.