North American stocks continued to struggle after the U.S. benchmark index fell 2.4 per cent last week, extending a losing streak driven by uncertainty over whether the United States can avoid the so-called fiscal cliff.
Shortly after noon, the Dow Jones industrial average was down 21 points or 0.2 per cent, to 12,794. The broader S&P 500 was down 2 points or 0.1 per cent, to 1378. In Canada, the S&P/TSX composite index was down 7 points or less than 0.1 per cent, to 12,190.
U.S. lawmakers are in discussion on how to deal with spending and revenue issues in an attempt to avoid automative tax increases and spending cuts next year, which threaten to push the economy back into recession and hammer the country’s credit rating. The uncertainty has been hanging over stocks ever since Barack Obama won a second Presidential term in elections last week.
Within the S&P 500, economically defensive stocks showed some gains: telecom stocks rose 0.5 per cent and health care stocks rose 0.4 per cent. Meanwhile, economically sensitive stocks were among the biggest laggards: Tech stocks fell 0.6 per cent as Apple Inc. resumed its selloff. Financials fell 0.2 per cent.
Within Canada’s benchmark index, commodity producers were the chief laggards. Energy stocks fell 0.2 per cent and materials fell 0.7 per cent.
However, The Brick Ltd. jumped 52.3 per cent after agreeing to a $700-million takeover offer from retailer Leon’s Furniture Ltd. Leon’s rose 0.7 per cent.
In Europe, the U.K.’s FTSE 100 finished the day essentially flat, while Germany’s DAX index rose less than 0.1 per cent.
Commodities moves slightly higher. Crude oil rose to $86.11 (U.S.) a barrel, up 4 cents. Gold rose to $1,734 an ounce, up $3.50.