TSX closes lower in shortened trading session on stalled fiscal talks

TORONTO — The Toronto stock market ended lower on Monday as concerns about stalled talks over the U.S. federal budget dominated attention ahead of the Christmas holiday break.The S&P/TSX composite index was down 14.90 points to 12,370.80, in a shortened trading session that ended at 1 p.m. ET. The TSX Venture Exchange rose 7.89 points to 1,185.60.The Canadian dollar was at 100.88 cents US, up 0.22 of a cent.Attention was focused on a deadline for U.S. politicians to avoid a combination of automatic tax increases and spending cuts that will go into effect in the New Year. There’s a fear that the U.S. economy could be pushed into a recession of it goes over the so-called “fiscal cliff.”The Republican-dominated House has been at odds with the Democrat controlled White House and Senate over the best way to deal with the U.S. government’s huge deficits. The two sides have been unable to find a workable compromise.“People are just waiting to see what happens,” said Colin Cieszynski, market analyst at CMC Markets Canada.“Nobody really wants to go out and rock the boat at this point.”In commodities, the January crude oil contract on the New York Mercantile Exchange slid nine cents to US$88.57 a barrel.March copper was down 1.8 cents at US$3.55 a pound. February gold bullion dropped 40 cents to US$1,659.70 an ounce.On Wall Street, where markets also closed early, investors appeared to be staying cautious as the budget deadline nears.The Dow Jones industrials dropping 51.76 points to 13,139.08, the Nasdaq fell 8.41 points to 3,012.60 and the S&P 500 index was off 3.49 points at 1,426.66.North American markets will be closed for the Christmas Day holiday, and the TSX will also be closed on Wednesday for Boxing Day.Key U.S. lawmakers are already predicting that much of their holiday season will be spent in Washington. Many believe that the most that will be achieved is a stop-gap measure to avoid the federal spending cuts and broad tax hikes that would take effect Jan. 1 if no budget deal is reached.President Barack Obama said Friday that he is “ready and willing” to get a big package done to deal with the fiscal cliff, adding there’s no reason not to protect middle-class Americans from tax increases.Obama said spoke Friday with House Speaker John Boehner and met with Senate Majority Leader Harry Reid. He says Congress should pass a plan to extend tax breaks for the middle class and extend unemployment benefits.Senator Joe Lieberman said Sunday that it “It’s the first time that I feel it’s more likely we’ll go over the cliff than not,” following the collapse late Thursday of House Speaker John Boehner’s plan to allow tax rates to rise on million-dollar-plus incomes. Wyoming Senator Jon Barrasso, a member of the Republican leadership, predicted the new year would come without an agreement.In corporate developments, Chevron Canada Ltd. moved to acquire a 50% stake in a proposed liquefied natural gas export terminal near Kitimat, B.C., in a series of deals that will Encana and EOG Resources, Inc. sell their parts in the project.The Chevron Corp. subsidiary and Apache Corp. (NYSE:APA) will share the project 50-50.Encana shares were down 47 cents at $19.66 in Toronto. In New York, Chevron slid 98 cents to US$108.63, EOG slipped 80 cents to US$122.77 and Apache dropped $1.32 to $78.68.Shares of Sears Canada Inc. were up 17 cents to $10.83 after the retailer said chief financial officer Sharon Driscoll, who has held the post since December 2010, will leave the company on Jan. 4 to pursue other interests.Most markets across Europe were only open for half a day and will only re-open again on Thursday. German markets, and others, were closed for Christmas Eve.Among those that were open, Britain’s FTSE 100 index of leading British shares closed up 0.2% at 5,954.18 while the CAC-40 in France was down an equivalent rate at 3,652.61.Earlier in Asia, Hong Kong’s Hang Seng, closed up 0.1% at 22,531.51 while South Korea’s Kospi rose less than 0.1% to 1,981.82. Japanese markets were closed for the Emperor’s birthday holiday.The Canadian Press