TSX closes higher amid mixed economic data, uncertainty over fiscal cliff talks

TORONTO – The Toronto stock market closed slightly higher amid a mixed bag of economic data while traders kept a close eye on how U.S. budget negotiations are progressing.

The S&P/TSX composite index gained 36.19 points to 12,239.04. The TSX Venture climbed 2.52 points to 1,220.9 with traders unwilling to make big commitments while Democrat and Republican leaders wrangle over ways to avoid steep spending cuts and significant tax increases from kicking in automatically in January if there’s no deal.

“No one is wanting to step in and take a position ahead of seeing if there’s a resolution with the fiscal cliff,” said Jennifer Dowty, portfolio manager at Manulife Asset Management.

“In order to get the markets moving, we need to see a fiscal cliff resolution. Until that time, the markets, I think, are just going to lack momentum and continue to trade sideways.”

The Canadian dollar was down 0.09 of a cent to 100.64 cents US as the economy stalled out during September. Statistics Canada reported there was no growth in gross domestic product during that month following a 0.1 per cent dip during August.

That translated into third quarter economic growth of 0.6 per cent on an annualized basis, versus expectations of 0.8 per cent growth.

The agency said the disappointing performance reflected exports, which fell two per cent in the third quarter.

New York markets were little changed amid a mixed bag of economic data.

The Dow Jones industrials added 3.76 points to 13,025.58 after a government report showed that consumers cut back on spending last month with no growth in personal income.

U.S. consumer spending dropped 0.2 per cent in October. That’s down from an increase of 0.8 per cent in September and the weakest showing since May.

Like previous economic reports, the Commerce Department’s consumer spending report was skewed by superstorm Sandy which struck the northeast coast.

That report was tempered by a positive reading of the manufacturing sector in the American Midwest. The Chicago Purchasing Managers Index for November moved into expansion territory, rising to 50.4 from 49.9 in October.

Other data showed eurozone unemployment at a record high.

The Nasdaq was 1.79 points lower to 3,010.24, while the S&P 500 index edged up 0.32 of a point to 1,416.27.

Markets have been volatile this week as top Republicans and Democrats offered differing views on what’s holding up a deal to avoid a fiscal cliff at the end of the year.

Economists believe that the combination of spending cuts and tax increases would take a big bite out of economic growth and likely send the U.S. economy back into recession.

Republican House Speaker John Boehner said Friday that negotiations to surmount the impasse are going “almost nowhere.”

President Barack Obama took his case to an audience in a Philadelphia suburb, saying Republicans should extend existing Bush-era tax rates for households earning $250,000 or less, while allowing increases to kick in for the wealthy.

His comment came a day after his administration proposed US$1.6 trillion in new taxes over 10 years and savings of about $400 billion in entitlement programs like Medicare. Republicans rejected the offer as unreasonable.

But despite the volatility, both the TSX and the Dow closed essentially flat for the week.

The utilities led advancers, up 0.77 per cent with Algonquin Power & Utilities (TSX:AQN) ahead 11 cents to $6.74.

The industrials sector also provided lift as Bombardier Inc. (TSX:BBD.B) ran up 11 cents to $3.51.

The TSX mining sector moved up 0.65 per cent while March copper gained four cents to US$3.65 a pound. Inmet Mining (TSX:IMN) climbed $2.25 to $67.75.

Inmet said Friday the Toronto Stock Exchange has deferred its review of the miner’s recently announced shareholder rights plan. Inmet adopted the plan earlier this week after it announced it had rejected an unsolicited takeover offer from First Quantum Minerals Ltd. (TSX:FM) worth $4.9 billion in stock and cash.

The financials group was ahead 0.44 per cent as Scotiabank (TSX:BNS) gained 78 cents to $56.

The telecom sector rose 0.37 per cent as Telus Corp. (TSX:T) voting shares rose 27 cents to $64.84 on very heavy volume of million shares as it said the non-Canadian ownership of its common shares is down, leading it to suggest that Mason Capital may have reduced its stake in the company. Telus has been embroiled in a fight with the U.S. hedge fund over a plan to convert the telecommunication company’s non-voting shares into voting shares.

The energy sector was flat as the January crude contract on the New York Mercantile Exchange gained 84 cents to US$88.91 a barrel and the energy sector was down per cent. Imperial Oil (TSX:IMO) fell 85 cents to US$42.03.

Cenovus Energy (TSX:CVE) shares were 29 cents higher to $33.36 while Environment Minister Peter Kent refused to approve an Alberta gas project planned by the Calgary-based company. The proposal involves a project in the CFB Suffield national wildlife area. Kent says the gas project would put wildlife at risk and he had to turn it down.

The gold sector led decliners, down per cent with February bullion off $16.80 to US$1,712.70. Kinross Gold Corp. (TSX:K) faded 13 cents to $10.06.