The Toronto stock market advanced Friday after top U.S. congressional leaders struck a conciliatory pose as they got together to discuss a resolution to a looming fiscal crisis that has the potential to seriously disrupt the American economy.
The S&P/TSX composite index registered its first positive close all week, gaining 66.34 points to 11,877.72.
The TSX Venture Exchange was ahead 12.64 points to 1,235.34 and the Canadian dollar added US0.03¢ to US99.9¢.
U.S. markets also closed higher with the Dow Jones industrials ahead 45.93 points to 12,588.31, the Nasdaq up 16.19 points at 2,853.13 and the S&P 500 index up 6.55 points at 1,359.88.
Following a morning meeting at the White House, House Speaker John Boehner and Senate Minority Leader Mitch McConnell both said they offered higher tax revenue as part of a deal. Mr. Boehner said he outlined a framework that is consistent with President Barack Obama's call for a "balanced" approach of both higher revenue and spending cuts.
North American markets have nosedived over the previous seven sessions as the results of the U.S. election deepened pessimism that politicians can avoid a "fiscal cliff" - a series of tax hikes and spending cuts set to take effect at the start of 2013.
Some economists estimate that if the current automatic measures aren't changed, about five percentage points will be cut from U.S. growth - plunging the world's largest economy into recession and damaging an already fragile global economy.
The TSX has tumbled 3.9% since the election as worries about a sudden slowing of economic growth would be bad news for a resource heavy market like Toronto's, since a lessening of demand for oil and metals would put pressure on mining and energy stocks.
The Dow industrials has fallen 5% as investors worry about higher dividend and capital gains taxes and traders also took in data showing that superstorm Sandy depressed U.S. industrial output in October.
The Federal Reserve says industrial output fell 0.4% last month, after a 0.2% gain in September. Excluding the storm's impact, production at U.S. factories, mines and utilities would have been up about 0.6%.
Tech stocks led advancers as Research In Motion Ltd. ran ahead 43¢, or 4.9%, to $9.23.
The gold sector was up about 0.9% as December bullion edged up US90¢ to US$1,714.70 an ounce. Barrick Gold Corp. was ahead 49¢ to $33.77 and Kinross Gold Corp. gained 18¢ to $9.51.
Financials also strengthened during the afternoon as Royal Bank of Canada ran up 54¢ to $55.62.
