The Toronto stock market was slightly lower Tuesday amid reports that U.S. Senate leaders were close to reaching a deal to increase the country’s debt ceiling and forestall a possible default.
The S&P/TSX composite index lost 15 points to 12,877.11.
The focus shifted from the Senate to the House of Representatives shortly after the open on word that Republicans planned to push forward their own bill to reopen the government and raise the debt limit.
But at a news conference late in the morning, Republican House Speaker John Boehner did not mention a specific piece of legislation, saying “we’re speaking with our members, trying to find a way forward.”
The Canadian dollar was down 0.12 of a cent to 96.46 cents US just two days before the U.S. hits its borrowing limit, at which point the government would start to run out of money to pay creditors.
U.S. indexes were mixed following solid gains Monday but both New York and Toronto markets held on to last week’s sharp run-up on optimism a deal would be reached, leaving the TSX and Dow both up more than one per cent.
“The markets will continue to move up despite Washington,” said Ian Nakamoto, director of research at 3MACS Inc.
“As long as it’s not the worst case scenario, I think we will continue to move up. There is a strong resilience to bad news.”
On Tuesday, the Dow Jones industrials were down 30.12 points to 15,271.14. The Nasdaq was 1.75 points higher at 3,817.03 and the S&P 500 index points shed 1.93 points to 1,708.21.
The emerging Senate pact would permit the Treasury to borrow normally until early to mid-February.
It would also reopen the government through Jan. 15.
Democratic and Republican aides described the outlines of the potential agreement on condition of anonymity because the discussions were ongoing.
The plan arrived at over the last few days is a far cry from the assault on Obamacare that tea party Republicans originally demanded as a condition for a short-term funding bill to keep the government fully operational and a further increase in the debt ceiling.
Any legislation backed by both Democrat Senate leader Harry Reid and Republican Senate leader Mitch McConnell can be expected to sail through the Senate.
But it’s another story elsewhere in Congress, as it wasn’t clear whether House Republicans will go along with whatever the Senate works out.
The industrials sector was down 0.5 per cent as the Teamsters union warned of a potential strike or lockout at Canadian National Railways (TSX:CNR) starting on Oct. 28. The union represents some 3,300 conductors, trainmen, yardmen and traffic co-ordinators at CN. Spokesman Roland Hackl says concessions being sought would see CN workers work longer hours with less rest time in between trips. CN shares fell 94 cents to $108.55.
The financials sector was also lower.
The Sunday Times reported that TD Bank is considering buying the Royal Bank of Scotland’s U.S. retail business Citizens for US$13-billion. TD Bank and RBS both declined comment on the report and TD (TSX:TD) shares fell 58 cents to $91.93.
The tech sector led advancers, up one per cent as Wi-LAN Inc. (TSX:WIN) announced patent settlement deals with U.S. tech companies Hewlett-Packard Co. and Novatel Wireless Inc. The deals end litigation with both. Financial terms were not disclosed. Wi-LAN has licensed its intellectual property to more than 270 companies worldwide that manufacture or sell a wide range of communication and consumer electronics products. Wi-Lan shares gained 11 cents to $4.23.
BlackBerry (TSX:BB) rose two cents to $8.37 as it appealed to customers to stay with the troubled smartphone maker as it restructures. In an open letter released Monday afternoon on Twitter and Facebook, and in some newspapers Tuesday, BlackBerry tells its “customers, partners and fans” that they can continue to count on the company.
Commodities were generally lower after optimism over reaching a U.S. debt deal sent prices higher for copper, oil and gold on Monday.
The base metals sector was up 0.8 per cent with December copper unchanged at US$3.30 a pound. Teck Resources (TSX:TCK.B) climbed 81 cents to C$27.97.
The energy sector was ahead 0.2 per cent as the November crude contract on the New York Mercantile Exchange was off 53 cents at US$101.88 a barrel. Canadian Natural Resources (TSX:CNQ) gained 50 cents to C$33.80.
The gold sector was flat even as December bullion declined $5.70 to US$1,270.90 an ounce. Barrick Gold Corp. (TSX:ABX) was ahead 11 cents to C$17.92.
In earnings news, Coca-Cola posted quarterly earnings of $2.45-billion, or 54 cents per share, up from $2.31-billion, or 50 cents per share a year ago. Ex-items, earnings per share were 53 cents which matched expectations. Revenue fell three per cent to $12.03, which was short of the $12.05-billion analysts expected. Its shares were unchanged at US$37.91.
Among European bourses, London’s FTSE 100 index and the Paris CAC 40 rose 0.5 per cent while Frankfurt’s DAX was up 0.8 per cent.