Newspaper article The Canadian Press

Stock Higher, Politicians Fuel Uncertainty over Pace of Fiscal Cliff Talks

Newspaper article The Canadian Press

Stock Higher, Politicians Fuel Uncertainty over Pace of Fiscal Cliff Talks

Article excerpt

TSX higher amid fiscal cliff uncertainty


TORONTO - The Toronto stock market closed higher Thursday as traders watched American politicians engage in finger-pointing while weighing the progress of negotiations aimed at getting a deal on averting a U.S. fiscal crisis by the end of December.

The S&P/TSX composite index gained 62.52 points to 12,202.85 while the TSX Venture Exchange climbed 13.01 points to 1,218.38

Traders also took in an earnings report from Royal Bank (TSX:RY) that beat expectations. The bank posted quarterly net earnings of $1.9 billion or $1.25 a share. Adjusted net earnings came in at $1.27 a share, beating estimates by a penny.

RBC also handed in a record full-year profit of $7.5 billion, up 17 per cent from 2011. Its shares were 26 cents higher to $58.61.

The Canadian dollar was down 0.09 of a cent to 100.73 cents US.

U.S. indexes were higher, but off the best levels of the session after House Speaker John Boehner expressed disappointment with the pace of talks with the White House to avoid going over the fiscal cliff.

Following a meeting with Treasury Secretary Tim Geithner, he said Republicans have put concessions on the table, but President Barack Obama still has to outline the spending cuts he's willing to make.

"We have a debt crisis, it's the spending that is out of control," he told reporters following the meeting.

Shortly after, Senate Majority Leader Harry Reid chimed in, saying President Obama is still waiting for a serious offer from Republicans.

"We need Republicans to come forward with something," he said.

The Dow Jones industrials was up 36.71 points to 13,021.82.

The Nasdaq was up 20.25 points to 3,012.03, while the S&P 500 index climbed 6.02 points to 1,415.95.

Traders have been focused on negotiations aimed at avoiding the fiscal cliff, the name for sharp tax increases and spending cuts that would occur in January without a deal. There are fears that the combination could deliver a shock to the economy that would result in knocking the U.S. back into recession.

Markets have been whipsawed as every day seems to bring a new assessment of where negotiations stand. Traders were reassured Wednesday and markets advanced after House Speaker John Boehner said he was optimistic that a deal can be reached with the president.

Optimism was further bolstered after Obama said that he believes that members of both parties can reach a "framework" on a debt-cutting deal before Christmas.

Analysts believe that would suit markets just fine since expectations for a full deal covering everything on the table just isn't realistic.

"Do you get a nice, sweet all-agreed-to-sum-up deal together in one great big shot by Dec. 31? No," said Gareth Watson, vice-president Investment Management and Research, Richardson GMP Ltd.

"That's something that is going to take a lot more time to figure out. …

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