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Toronto Up – China On The Move

The Toronto stock market closed higher as mining stocks benefited from the release of encouraging Chinese economic data. Elsewhere, the market stalled amid concerns about whether the U.S. can avoid a fiscal crisis at the end of the month. The S&P/TSX composite index was 7.55 points higher at 12,296.72. The Canadian dollar closed down 0.17 of a cent to 101.37 cents US. Chinese stocks surged overnight thanks to an upbeat reading on factory activity in that country.  The Shanghai composite index rallied 4.3 per cent, the most in three years, after the HSBC Flash PMI report came in at 50.9 so far in December, a 14-month high and providing one of the clearest signals yet that the recovery in the Chinese economy is starting to pick up momentum.

U.S. indexes finished in the red as the positive Chinese data was overshadowed by budget talks to stop the automatic imposition of huge spending cuts and tax increases that could plunge the U.S. back into recession. The Dow Jones industrials lost 35.71 points to 13,135.01, the Nasdaq fell 20.83 points to 2,971.33, and the S&P 500 index was off 5.87 points at 1,413.58.  Investors are still reluctant to load up on more equities as negotiations drag on to avert the U.S. “fiscal cliff” of tax hikes and spending cuts set to take hold at the start of January. There continues to be few concrete signs that any deal is imminent. A meeting between House Speaker John Boehner and U.S. President Barack Obama late Thursday was said to be “frank” and the two sides are keeping the lines of communication open. Mr. Obama may have a bit of an upper hand in negotiations given several recent public opinion polls show broad support for his position, and Republicans could get the majority of the blame if a deal isn’t reached.

Market Update as of December 14 2012

The TSX closed at 12296, up 137 points or +1.13% over the past week. YTD the TSX is up 2.9%.
The DOW closed at 13135, down 20 points or -0.15% over the past week.YTD the DOW is up 7.50%.
The S&P closed at 1413, down 5 points or -0.35% over the past week.YTD the S&P is up 12.4%.
The Nasdaq closed at 2971, down 7 points or -0.24% over the past week.YTD the Nasdaq is up 14.1%.


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Sources: Bloomberg; Investment Executive: globeadvisor