Stock markets stay focused on fiscal cliff in shortened trading day

TORONTO – The Toronto stock market is likely to move lower on Monday in a shortened trading session.

The Canadian dollar was at 100.77 cents US, up 11-100ths of a cent from Friday’s close.

Stock markets on both sides of the border will close early for the holiday. Stock markets close at 1 p.m. ET, though some trading on the TSX won’t wrap up until 1:30 p.m.

Attention was still focused primarily on the fiscal cliff deadline, which is now less than a week away.

Dow Jones industrial futures are down 39 points to 13,097. The broader S&P futures have slipped 5.6 points to 1,420.30. Nasdaq futures are down 12 points to 2,648.50.

Key U.S. lawmakers are already predicting that much of their holiday season will be spent in Washington. Many believe that the most that will be achieved is a stop-gap measure to avoid the federal spending cuts and broad tax hikes that would take effect Jan. 1 if no budget deal is reached.

President Barack Obama said later Friday that he is “ready and willing” to get a big package done to deal with the fiscal cliff, adding there’s no reason not to protect middle-class Americans from tax increases.

Obama says he spoke Friday with House Speaker John Boehner and met with Senate Majority Leader Harry Reid. He says Congress should pass a plan to extend tax breaks for the middle class and extend unemployment benefits.

Obama says no one can get 100 per cent of what they want and there are “real consequences” to how they deal with the across-the-board tax increases and steep spending cuts scheduled to kick in Jan. 1. Economists fear the combination could deliver a blow to the U.S. economy.

A deal must be reached to avoid going over the so-called fiscal cliff, which would involve the automatic imposition of hundreds of billions of dollars in spending cuts and tax increases that could plunge the world’s largest economy back into recession and depress economies around the world.

In commodities, the January crude contract on the New York Mercantile Exchange slid 17 cents to US$88.49 a barrel.

March copper was up 1.5 cents at US$3.55 a pound. February bullion added $2.20 to US$1,662.30 an ounce.

Most markets across Europe were only open for half a day and will only re-open again on Thursday. German markets, and others, were closed for Christmas Eve.

Among those that were open, Britain’s FTSE 100 index of leading British shares closed up 0.2 per cent at 5,954.18 while the CAC-40 in France was down an equivalent rate at 3,652.61.

Earlier in Asia, Hong Kong’s Hang Seng, closed up 0.1 per cent at 22,531.51 while South Korea’s Kospi rose less than 0.1 per cent to 1,981.82. Japanese markets were closed for the Emperor’s birthday holiday.