The Toronto stock market was lower midday Tuesday with traders hopeful an agreement can be reached to end a U.S. budget crisis that threatens to end in the country defaulting on its debts.
The S&P/TSX composite index dropped 60.44 to 12,727.81 at noon hour ET.
The Canadian dollar slid 0.18 cents to 96.80 cents U.S.
Talisman Energy was in focus after activist U.S. investor Carl Icahn disclosed Monday that he has bought more than 61.5 million shares of the Calgary-based energy giant for a 5.97% stake. Its shares were up a penny to $13.16 on the TSX, on top of a 4.8% advance Monday.
The telecom sector was the biggest decliner. Manitoba Telecom Services fell $3.18, or almost 10%, to $29.18 after the federal government rejected a deal that would have seen its business unit, Allstream, sold to Egyptian investment group Accelero Capital Holdings. It said the government cited "unspecified national security concerns" for the decision.
The Winnipeg company said Monday it was "extremely surprised and disappointed" by the decision to not approve the deal, which was announced last May. At the time, the company valued the sale at $520 million.
The gold sector gained ground and Centerra Gold climbed seven cents to $4.87.
The energy component improved while Canadian Natural Resources was ahead 38 cents to $32.56.
Techs were also supportive with BlackBerry up nine cents to $8.29.
The base metals group was off as December copper gained two cents to $3.32 U.S. a pound. First Quantum Minerals dropped 20 cents to $17.74.
On the economic slate, Canada Mortgage and Housing Corporation reported that Canadian housing starts rose more than expected in September.
The seasonally adjusted annualized rate of housing starts was 193,600 units last month, up from an upwardly revised 184,000 in August and surpassing analysts' expectations for 185,000.
Statistics Canada reported that out merchandise imports grew 2.1% in August, while exports were up 1.8%. As a result, Canada's trade deficit with the world went from $1.2 billion in July to $1.3 billion in August. The market call was for a negative $0.7-billion figure during the month.
ON BAYSTREET
The TSX Venture Exchange fell 4.84 points to 942.68
All but two of the 14 Toronto subgroups were lower midday, weighed mostly by metals and mining, down 2.3%, materials, sliding 1.6%, and global base metals, declining 1.5%.
Only a 0.3% gain by consumer staples and a slight 0.1% gain by industrials broke the monotony.
ON WALLSTREET
Stocks fell again Tuesday as investors remained nervous about a looming debt ceiling crisis.
The Dow Jones Industrials jettisoned 88.01 points to greet noon Tuesday – day eight of the legislative standoff -- at 14,848.20
The S&P 500 index lost 12.97 points to 1,663.15. The NASDAQ plummeted 69.17 points to 3,701.21
While the Dow has dropped more than 250 points since the shutdown began, the markets are actually performing better than many had expected. All three major indexes remain up more than 13% for the year.
Despite heated posturing, many experts think the Democrats and Republicans will be able to reach a last-minute agreement to raise the debt ceiling before October 17 and avoid a default.
Tuesday is also the start of third-quarter earnings season, with results due after the closing bell from aluminum producer Alcoa and Yum Brand, the parent of KFC, Pizza Hut and Taco Bell.
While third-quarter earnings are expected to be lackluster, investors will likely remain focused on the debt drama playing out in Washington.
Shares of J.C. Penneyrose by more than 4% after the embattled retailer announced that sales were up in September from August. The company also reported a surge in online purchases during September.
But J.C. Penney still has a lot to prove. Even with Tuesday's bump, shares are down more than 50% for the year.
Prices for the 10-year U.S. Treasury recovered lost ground, lowering yields to Monday’s 2.63%. Treasury prices and yields move in opposite directions.
Oil prices took on 58 cents to $103.61 U.S. a barrel.
Gold prices regained $1.50 at $1,326.20 U.S. an ounce.
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