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Toronto stock market makes slight gains on US budget talks, commodities mixed

TORONTO – The Toronto stock market crept up shortly after it opened Tuesday amid signs that U.S. political leaders are moving closer to a deal to steer clear of the “fiscal cliff.”

The S&P/TSX composite index rose 27.63 points to 12,308.98, while the TSX Venture Exchange ticked back 0.67 of a point to 1,184.32.

The Canadian dollar was down 0.12 of a cent to 101.54 cents US.

A new proposal softens President Barack Obama’s long-held insistence that taxes rise on individuals earning more than $200,000 and families making more than $250,000. He is now offering a new threshold of $400,000 and is lowering his 10-year tax revenue goals he had argued for a few weeks ago.

Obama met on Monday with the chief Republican leader opposed to his plans, House of Representatives Speaker John Boehner.

On Wall Street, the Dow Jones industrials gained 15.17 points to 13,250.56 and the Nasdaq rose 11.68 points to 3,022.28. The S&P 500 index was up 2.60 points at 1,432.96.

Meanwhile, the U.S. current account trade deficit narrowed in the July-September quarter to the smallest level since late 2010, but the improvement may not last.

The U.S. Commerce Department said the deficit fell to $107.5 billion in the third quarter, down nine per cent from the second quarter imbalance of $118.1 billion. It was the lowest trade gap since the final three months of 2010.

In commodities, oil prices trekked higher as the January crude contract on the New York Mercantile Exchange rose 20 cents to close at US$87.40 a barrel.

March copper declined nearly a cent to US$3.66 a pound while February gold bullion moved down 10 cents to US$1,698.10 an ounce.

Air Canada (TSX:AC.B) plans to launch its new low-cost airline Tuesday in Toronto. The unnamed discount carrier will focus on leisure destinations in the United States and Caribbean and some routes in Europe. Shares of the company rose two cents to $1.72.

In Europe, the FTSE 100 index of leading British shares was up 0.3 per cent at 5,932 while Germany’s DAX rose 0.4 per cent to 7,637. The CAC-40 in France rose 0.2 per cent to 3,644.

In Asia, Tokyo’s Nikkei 225 rose 1 per cent to 9,923.01, adding to the previous session’s 0.9 per cent gain. China’s benchmark Shanghai Composite Index was up 0.1 per cent to 2,162.46 while Hong Kong’s Hang Seng fell 0.1 per cent to 22,494.73.