TORONTO - The Toronto stock market moved higher on Wednesday driven by strength in the mining and metals sector, while Wall Street lost ground after plans to avert the "fiscal cliff" hit a snag in Washington.
The S&P/TSX composite index rose 69.29 points to 12,403.63, as key commodities prices were mixed. The TSX Venture Exchange gained 0.52 of a point to 1,176.52.
The Canadian dollar was down 0.25 of a cent to 101.20 cents US.
The TSX metals and mining sector gained 2.8 per cent, with Sherritt International (TSX:S) rising 6.5 per cent to $5.75 and Teck Resources (TSX:TCK.B) lifting 49 cents to $35.99.
Energy stocks rose 0.4 per cent as the February crude contract on the New York Mercantile Exchange rose $1.58 to US$89.98 a barrel. The January contract expired at the end of the session.
March copper declined 4.8 cents to US$3.61 a pound while February gold bullion moved back $3 to US$1,667.70 an ounce.
Traders south of the border showed they're losing patience with budget negotiations between President Barack Obama and Republican leaders that appear to be making little headway.
The White House threatened to veto House Speaker John Boehner's backup plan to avoid automatic tax increases and government spending cuts that are set to take effect Jan. 1 if no deal is reached on cutting the government's budget deficit.
Boehner had proposed a "Plan B," separate from negotiations with the White House, that would extend decade-old tax cuts for everyone making less than $1 million a year.
The Dow Jones industrials lost 98.99 points to 13,251.97, giving back most of the gains made in the previous session. The Nasdaq fell 10.17 points to 3,044.36 while the S&P 500 index was off 10.98 points at 1,435.81.
Concerns are that if a budget plan isn't reached by the year-end deadline then markets will begin a steep selloff to contend with the possibility the U.S. could dip into another recession that could spread to other economies of the world.
"Each of the two sides realize the deadline is pending and if they don't get it done, I can see getting into a little bit of political football where the point at each other and blame the other guy," said Greg Eckel, portfolio manager at Morgan, Meighen and Associates.
"The public down there recognizes, and will hold both parties responsible, I think. They don't have the option to back out and point at the other guy. They together have to get this done."
The U.S. Commerce Department said that builders broke ground on fewer houses in November, likely in part due to superstorm Sandy in the U.S. Northeast. The report says builders began construction of homes at a seasonally adjusted annual rate of 861,000. That's three per cent lower than October's annual rate of 888,000, which was the fastest since July 2008.
"Keep in mind that growth in housing starts was extremely strong in the prior three months, so some giveback is not a concern at this point, especially given what permits did in November," BMO Capital Markets economist Robert Kavcic wrote in a note.
Meanwhile, the Teranet-National Bank Canadian housing price index fell in November from a month earlier. The composite index covering 11 major urban centres stood at 154.02 last month, down 0.4 per cent from October.
And Canadian bank CIBC is forecasting "very mediocre" domestic growth next year, blaming weakness in the world economy and an absence of key economic drivers at home. CIBC says it now expects economic growth of only 1.7 per cent in 2013, down from its previous estimate of two per cent.
The International Monetary Fund has told the Bank of Canada to hold off on interest rate hikes until the economy improves. The IMF report outlines a domestic economy that is doing reasonably well in the face of global headwinds, but also one that is vulnerable to external shocks.
Shares of Uranium One (TSX:UUU) gained seven per cent, or 15 cents per share, to close at $2.26.
Activity in the uranium industry was in focus as Cameco Corp. (TSX:CCO) completed a US$430-million deal to buy one of Australia's largest undeveloped uranium deposits from BHP Billiton Ltd. (NYSE:BHP). Cameco shares rose 51 cents to $20.51.
General Motors will spend $5.5 billion to buy back 200 million shares of its stock from the U.S. Treasury by the end of this year. The Treasury plans to sell its remaining stake in GM over the next 15 months, allowing the automaker to shed the stigma of being partly owned by the American government. Shares of GM were up eight per cent to $27.62 in New York.
GM also announced it is moving production of the next version of its Camaro sports car from its Oshawa operation in Ontario to a plant in Michigan to save costs.