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At the open: TSX moves lower as fears of Syria strike return

President Barack Obama speaking by phone with his National Security staff regarding the situation in Egypt, while in Chilmark, Mass., Aug. 15

Amanda Lucidon/The White House via The New York Times

The Toronto stock market was lower with traders cautious amid worries that the U.S. will end up leading a military strike against Syria, which it accuses of using poison gas against its civilian population.

The S&P/TSX composite index was down 30.55 points to 12,709.95, led by mining and energy stocks as prices for oil and metals fell back.

The Canadian dollar rose 0.23 of a cent to 95.2 cents (U.S.) ahead of the Bank of Canada's scheduled interest rate announcement later in the morning (at 10 a.m. EDT).

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U.S. indexes were generally lacklustre after Barack Obama got a critical boost on Tuesday when a top Republican, House Speaker John Boehner, said he backed the U.S. president's call for a military strike.

The Dow Jones industrials were off 5.58 points to 14,828.38, the Nasdaq gained 4.23 points to 3,616.85 while the S&P 500 index added 1.13 points to 1,640.9.

The U.S. says it has proof that the regime of President Bashar Assad was behind attacks that Washington claims killed at least 1,429 people.

Obama said Tuesday that he's confident Congress will authorize a military strike. Congress could vote as early as next week, after it returns from summer break.

In economic news, Statistics Canada reported that the deficit widened from $460-million in June to $931-million in July. Economists had expected the deficit would widen to $400-million.

The agency said that Canada's merchandise imports grew 0.6 per cent in July while exports declined 0.6 per cent.

In the U.S., the U.S. trade deficit widened sharply in July from a four-year low in June, as companies exported fewer goods and imported a record number of foreign-made autos. The trade gap rose 13 per cent to $39.1-billion.

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A larger trade gap could drag on economic growth in the current July-September quarter.

The other major economic data from the U.S. is the release of the U.S. Federal Reserve's latest reading on the American economy. The so-called Beige Book surveys regional economic indicators and comes out at 2 p.m. EDT.

Traders also hope it will provide clues as to whether the Fed will start winding down its monthly $85-billion (U.S.) of bond purchases later this month.

Commodity prices headed lower and the gold sector was the biggest percentage loser, down 1.4 per cent while the December bullion contract lost $18.20 to $1,393.80 (U.S.) an ounce. Goldcorp Inc. was 45 cents lower to $30.97 (Canadian).

The metals and mining sector lost 1.3 per cent as December copper fell seven cents to $3.23 (U.S.), giving back Tuesday's gain that followed strong manufacturing data from China and the U.S. First Quantum Minerals declined 25 cents to $17.60 (Canadian).

October crude on the New York Mercantile Exchange ran down $1.10 to $107.44 (U.S.) and the energy sector shed 0.33 per cent.

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The telecom sector gave back some of the four per cent surge registered Tuesday after U.S. telecom giant Verizon agreed to buy out the remaining stake in its mobile phone business from Vodafone in a massive $130-billion (U.S.) deal. At the same time, Verizon made it clear it wasn't interested in entering the Canadian wireless market.

On the corporate front, Fiera Capital Corp. has announced two deals worth a combined $156.3-million (U.S.) under which it is acquiring a prominent U.S. wealth management firm and a global asset manager. Fiera says the deals for Los Angeles-based Bel Air Investment Advisors LLC and an affiliate as well as New York-based Wilkinson O'Grady & Co. Inc. are part of its strategy of expanding into U.S. markets. Fiera shares eased 14 cents to $11.15.

European bourses were negative as London's FTSE 100 index declined 0.43 per cent, Frankfurt's DAX was down 0.65 per cent and the Paris CAC 40 dropped 0.85 per cent.

Earlier in Asia, Japan's Nikkei 225 rose 0.5 per cent but benchmarks elsewhere in Asia fell. South Korea's Kospi declined less than 0.1 per cent, Australia's S&P/ASX 200 shed 0.7 per cent while Hong Kong's Hang Seng lost 0.3 per cent.

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