TSX headed for first negative close in seven sessions





The Toronto Stock Exchange was on track for its first negative close in seven sessions on Tuesday as gold producers fell after U.S. President Barack Obama agreed to extend Bush-era tax cuts.

The benchmark S&P/TSX composite index started out strong on Tuesday, but had lost those early gains by midday and for the rest of the day struggled to stay in positive territory. As the close approached it had fallen 25.34 points, or 0.19 per cent to 13,250.67, weighed down by its materials index.

The price of gold dropped $7.10 to $1,409.00 U.S. an ounce on Tuesday.

"Copper versus gold is the trade," said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, told Bloomberg. "The market is net down because gold is a very big weight in the index now. Plus, gold was trading at an all-time high. Whenever you have a new high come up, people always want to take a step back and take some profits."

The price of crude oil also fell on Tuesday, closing down 69 cents at $88.69 U.S. a barrel.

The Canadian dollar dropped 73 basis points to 98.90 cents U.S. in late-day trading.

U.S. markets were buoyed for most of the day by the announcement that tax cuts would be extended, in exchange for employment benefit extensions and other considerations.

But at the closing bell the Dow Jones industrial average was down 2.8 points, or 0.02 per cent, to 11,359.39. The Nasdaq composite held on to its gains, ahead 3.57 points, or 0.14 per cent, to 2,598.49.

Overseas markets advanced for the most part on Tuesday, with the exception of Tokyo's Nikkei index, which declined.