09/27/2013 08:27 EDT | Updated 11/27/2013 05:12 EST

TSX closes flat amid U.S. government shutdown worries, huge BlackBerry loss

TORONTO - The Toronto stock market closed flat on Friday, capping a session where traders opted for caution going into the weekend amid the possibility of a U.S. government shutdown early next week.

The S&P/TSX composite index inched up 2.46 points to 12,844.08 as BlackBerry turned in a huge quarterly loss and dismal sales figures.

BlackBerry lost US$965 million in the second quarter as revenue plunged 49 per cent from the previous quarter and 45 per cent from a year earlier to US$1.6 billion, amid very poor sales of its new smartphones. However, the results were in line with company estimates issued last week when BlackBerry announced 4,500 jobs would be cut from its global workforce.

BlackBerry shares (TSX:BB) (Nasdaq:BBRY) gained six cents to $8.28 on the Toronto Stock Exchange while in the U.S., BlackBerry shares added eight cents to US$8.03 on the Nasdaq market.

The Canadian dollar turned higher amid rising commodity prices, up 0.1 of a cent at 97.06 cents US.

There was skepticism that Congress can pass a funding bill to keep the U.S. government operating after Oct. 1, when its new fiscal year starts. Also, the U.S. borrowing limit needs to be raised before Oct. 17.

But Republicans want to tie the moves to defunding the Affordable Care Act, otherwise known as Obamacare, and slash spending.

"They can’t afford to mess around on this," said Wes Mills, chief investment officer at Scotia Asset Management PM Advisor Services.

"They’re digging in their heels because they’re tying the Obamacare passage to the debt ceiling. And ultimately, if they push too hard on that, it’s going to rattle markets big time."

Shortly before the close, President Barack Obama said the threat of a shutdown is probably already having a negative effect on the economy.

U.S. indexes were negative as investors digested a report showing higher consumer spending and income growth in August — and other data showing slowing consumer confidence in the United States.

The Dow Jones industrials dropped 70.06 points to 15,258.24, the Nasdaq was 5.83 points lower to 3,781.59 and the S&P 500 index was down 6.92 points to 1,691.75.

The U.S. Commerce Department said consumer spending rose 0.3 per cent in August. That’s up from a 0.2 per cent gain in July. Income rose 0.4 per cent in August, the best gain since February and up from a 0.2 per cent July increase.

The spending and income data is closely watched because consumer spending drives 70 per cent of U.S. economic activity.

The final read of the September University of Michigan's consumer confidence index came in at 77.5, down from 82.1 in August.

The consumer staples sector was the biggest gainer, up 0.7 per cent with drug store chain Jean Coutu (TSX:PJC.A) ahead 32 cents to $18.29.

The energy sector was up slightly with the November crude contract on the New York Mercantile Exchange down 16 cents to US$102.87 a barrel.

The gold sector also edged higher as nervousness about the U.S. budget fight sent December bullion up $15.10 to US$1,339.20 an ounce.

The base metals sector was the biggest decliner, down 1.6 per cent despite December copper on the Nymex rising two cents to US$3.33 a pound. Teck Resources (TSX:TCK.B) declined $1.19 to C$28.10.

In other corporate news, J.C. Penney, the struggling retailer that is trying to reassure the market about its financial stability, expects to raise about US$810.6 million via a public stock offering. J.C. Penney plans to offer 84 million shares priced at US$9.65 per share. That is a 7.3 per cent discount to Thursday’s closing price of $10.42 per share. Its stock dropped 13.15 per cent to US$9.05 in New York on Friday.

The TSX ended the week up a slight 0.29 per cent, held back by losses particularly in gold stocks. Worries about a government shutdown pushed the Dow industrials down 1.25 per cent for the week.