TROUBLED TSX
Markets slide, most sectors depressed over worries of U.S. government shutdown,
The Toronto stock market closed lower Monday as hopes faded that an 11th-hour deal would emerge on a compromise budget bill that would prevent a partial shutdown of the U.S. government at midnight.
The S&P/TSX composite index closed down 56.89 points to 12,787.19 as worry about the economic effect of such a shutdown depressed most sectors.
A notable exception was the real estate sector, which ran ahead 1.9 per cent as Brookfield Property Partners LP announced it wants to buy out other shareholders of Brookfield Office Properties Inc. in a stock-andcash deal it valued at $5 billion (U.S.).
Brookfield Property Partners al- ready owns a 51 per cent stake in Brookfield Office Properties. Brookfield Office Properties shares ran ahead $2.45, or 14.17 per cent, to $19.74 while Brookfield Property Partners units were a penny lower at $19.99.
The Canadian dollar closed flat at 97.06 cents (U.S.) as Canada’s economic growth in July came in better than expected.
Statistics Canada reported that the economy grew by 0.6 per cent in July, rebounding from a 0.5 per cent decline in June. The bounce — one of the biggest since the recession — was one-tenth of a point better than estimates.
New York also closed in the red but off the worst levels of the session as a midnight deadline loomed that would result in cuts to non-essential government services. The Dow Jones industrials was down as much as 171 points Monday before finishing the day128.57 points lower at 15,129.67. The Nasdaq fell 10.11 points to 3,771.48 and the S&P 500 index lost 10.2 points to 1,681.55. Some analysts suggested that losses were limited by the conviction that the two sides will have to compromise. “It’s much ado about nothing,” said John Stephenson, portfolio manager at First Asset Funds Inc. “Ultimately, (U.S. President Barack) Obama is not going to defund Obamacare, the Republicans will reduce the tax on medical devices and a few other things so they can claim a victory. And then eventually it will be resolved.” An even more worrisome deadline comes up Oct. 17. That is when the U.S. government hits its debt limit and will begin running out of cash to pay its bills. Worries about the economic impact of a U.S. government shutdown punished oil prices and the November crude contract on the New York Mercantile Exchange was down 54 cents at $102.20 a barrel after recovering from even greater losses earlier in the session. Prices also declined in the wake of data showing that Chinese manufacturing activity ticked up more slowly than expected in September. The gold sector was slightly higher as December bullion declined $12.20 to $1,327 an ounce.