TORONTO - The Toronto stock market closed lower Tuesday as the approaching "fiscal cliff" in the U.S. and a delay in organizing a crucial instalment of bailout money for Greece continued to discourage buyers.
The S&P/TSX composite index was down 56.8 points to 12,134.66. The showing continued a series of losses on markets since the results of last Tuesday's election left the U.S. political landscape largely unchanged and traders skeptical that lawmakers can head off the expiration of Bush-era tax cuts and the automatic launch of big spending cuts at the first of the year.
Going over this so-called fiscal cliff would make a serious dent in U.S. economic performance and likely send the country back into recession, dragging down other economies with it.
The nervousness has been expressed in lower volumes on the TSX. Volume Tuesday was 257.5 million shares, worth $3.65 billion, far less than the daily average so far this year of about 337 million shares worth nearly $5 billion.
Losses have been particularly severe on New York markets because of worries about higher dividend, capital gains and estate taxes with companies across all sectors taking a hit.
"So if you are an investor and making a lot of money in Apple, for instance, you would be a seller today because if you donít sell today, maybe next year when you go into the market you probably will be hit with a higher tax category on the capital gains," said Sid Mokhtari, market technician at CIBC World Markets.
"Thereís a shift in attitude in terms of 'letís take profits now with a lower tax category and revisit everything next year'."
The TSX Venture Exchange lost 18.57 points to 1,286.89.
The Canadian dollar was down 0.06 of a cent from Friday's close to 99.81 cents US. The dollar has been under pressure recently as nervous traders have bought into the safe-haven status of U.S. Treasuries and avoided riskier assets such as resource-based currencies.
U.S. markets were lower after a wave of selling last week pushed all three major indexes down more than two per cent and the Dow Jones industrials stepped back 58.9 points to 12,756.18.
The Nasdaq was 20.37 points lower at 2,883.89 while the S&P 500 index dropped 5.5 points to 1,374.53.
Financial markets also focused on Greece after ministers from the 17 countries that use the euro failed to agree on how to put the countryís bailout program back on track.
The EU and the International Monetary Fund disagree on the timeline for bringing Greeceís debts down to a manageable level. The European Commission, the EUís executive arm, wants to give Greece until 2022 to reduce its debt to 120 per cent of gross domestic product; but the IMF wants to stick to the original deadline of 2020.
Giving Greece the extra time means the country would require about Ä33 billion in extra funding. Finance ministers will meet Nov. 20 to decide where that extra funding will come from.
The base metals sector led decliners, down 2.13 per cent even as December copper shook off early losses to close unchanged at US$3.47 a pound. HudBay Minerals (TSX:HBM) dropped 43 cents to $9.21 while Inmet Mining (TSX:IMN) dropped $3.06 to $54.44 as the miner denied reports suggesting the company was in talks regarding the potential sale of the company. Britainís Daily Mail had reported speculation that First Quantum Minerals Ltd. (TSX:FM) "recently held informal takeover discussions with Inmet Mining." First Quantum shares declined 56 cents to $22.19.
The gold sector was down about one per cent as December bullion edged $6.10 lower to US$1,731.50 an ounce. Goldcorp Inc. (TSX:G) faded 51 cents to $42.93.
Tech stocks weighed with Research In Motion Ltd. (TSX:RIM) down 41 cents or 4.65 per cent to $8.40 while CGI Group (TSX:GIB.A) lost 42 cents to $23.61.
The energy sector lost 0.72 per cent as crude on the New York Mercantile Exchange was off 19 cents to US$85.38 a barrel. Suncor Energy (TSX:SU) shed 84 cents to $32.55.
Financials gave up ground as Manulife Financial (TSX:MFC) declined 15 cents to $12.15.
Health care and the consumer staples sectors were the sole advancers.
Shoppers Drug Mart Corp. (TSX:SC) rose $1.34 to $42.46 as the pharmacy retailer saw its third-quarter net profit slip to $168 million from $172 million a year ago. Adjusted net earnings per share was 81 cents, up from 79 cents in the same year-earlier period and in line with analyst estimates. Same-store sales were up 2.3 per cent.
Leonís Furniture Ltd. (TSX:LNF) shares fell 50 cents to $11.30 after the retailer posted $13 million of net income in the third quarter. That was a 15 per cent decline from the same time last year as the addition of four stores last year added overhead expenses during a period of flat sales growth. The earnings report came two days after announcing plans to acquire rival The Brick.
In other corporate developments, media and telecom company Quebecor Inc. (TSX:QBR.B) announced a restructuring program that will see its Sun Media arm cut about 500 jobs ó about 10 per cent of its workforce ó and close two production facilities as it seeks to reduce annual costs by $45 million. Quebecor shares were up 65 cents to $35.90 as it also posted quarterly net income of $18.6 million or 30 cents per share, down about 29 per cent from a year ago.
Mining giant BHP Billiton is selling its diamonds business, including its stake in the Ekati diamond mine, to Harry Winston Diamond Mines Ltd. (TSX:HW) for US$500 million in cash. Harry Winston shares fell 30 cents to $13.15.