TORONTO: Canada's main stock index was lower on Wednesday but off earlier lows after US House Speaker John Boehner voiced optimism that Republicans could broker a deal with the White House to avert the "fiscal cliff" of tax hikes and spending cuts that threatens a US recession in the new year.
The index had hit a one-week low in early dealings, led down by mining and energy stocks, as fresh doubts over the resolution of the US fiscal crisis hurt investor sentiment and pulled commodity prices lower.
Democrats and Republicans have been locked in a stalemate over how to solve the crisis, and Senate Majority Leader Harry Reid on Tuesday expressed disappointment that there was "little progress". The market was also skeptical about the impact of a deal reached earlier this week to reduce Greece's debt.
But the market perked up a bit after Boehner said that Republicans were willing to put revenues on the table to get a US fiscal deal if Democrats agreed to spending cuts.
"Investors are looking for a statement of how the United States really plans to resolve this problem. So far there doesn't seem to be a plan," said Fred Ketchen, director of equity trading at ScotiaMcLeod.
At midmorning, the Toronto Stock Exchange's S&P/TSX composite index was down 46.45 points, or 0.38 percent, at 12,065.18. Earlier in the session, the index hit 12,004.49, its lowest point since Nov. 20.
Material and energy stocks, which make up more than half the index's weight, fell 0.9 percent and 0.6 percent, respectively. Nine of the index's 10 main sectors were lower.
Gold miners dropped as gold prices fell 1.5 percent. Goldcorp Inc was down 1.7 percent at C$38.30, Eldorado Gold fell 2.1 percent to C$14.62, and Yamana Gold Inc shed 1.5 percent to C$18.96.
Oil producer Suncor Energy Inc, down 1.5 percent at C$32.41, played the biggest role of any single stock in leading the index lower. Oil prices also hit a one-week low on Wednesday.
In other news, Canadian Tire Corp Ltd agreed to buy closely held hockey chain Pro Hockey Life Sporting Goods Inc for C$85 million. Its shares were down 0.4 percent at C$66.73.
Research In Motion Ltd lost a contract dispute over the use of Nokia patents in a case which could halt sales of its BlackBerry phones if it does not reach a deal to pay royalties to the Finnish company. But RIM shares, which fell in early trading, later edged higher to C$10.73.
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