TSX slips as M&A deals worry investors

TORONTO (Reuters) - Canada's main stock index slipped on Monday as investors backed away from several companies involved in major transactions and failed to catch the "fiscal cliff" optimism that cheered U.S. stock markets.

Sun Life Financial Inc fell 3.9 percent to C$26.74 after saying it will sell its U.S. annuity business for $1.35 billion as the financial terms of deal fell short of market expectations.

Shares in First Quantum Minerals Ltd shed 4 percent to C$20.11 after the company turned hostile with a sweetened takeover bid for rival Inmet Mining . Inmet shares jumped 4.32 percent.

Shares of First Majestic Silver Corp fell 9.7 percent to C$20.45 after it announced the acquisition of Orko Silver Corp , a smaller rival.

The Toronto Stock Exchange's S&P/TSX composite index <.gsptse> at one point hit a one-week low, but pared some of those losses to end down 15.37 points, or 0.12 percent, at 12,281.35.

That was in stark contrast with the sharp gains seen in the United States, where the S&P 500 notched its strongest day in almost a month on hopes that a political deal to avoid the "fiscal cliff" of automatic tax hikes and spending cuts could be agreed on soon. <.n/>

"There's more confidence today in the U.S. market than there has been for some time and certainly we don't have anything here that is really striking on the positive side," said Fred Ketchen, director of equity trading at ScotiaMcLeod.

President Barack Obama and top Republican John Boehner met at the White House as aides for both major parties said they were optimistic that a fiscal deal could be reached in coming days.

Canada's energy sector notched gains, with Cenovus Energy up 0.9 percent at C$32.55 and Cameco Corp adding 2.9 percent to C$19.84. The discount of U.S. crude to the Brent benchmark narrowed following news that a key pipeline expansion will be completed next month.

Only four of the index's 10 main sectors ended in the red, though that included the heavyweight materials and financial groups.

Materials, which includes mining stocks, shed 0.7 percent, with Yamana Gold Inc down 1.9 percent at C$16.90.

"Investors may be hedging their bets. If nothing happens (to avoid the fiscal cliff), they want to see what effect that's going to have on the marketplace, whether it's already priced in," said Irwin Michael, portfolio manager at ABC Funds.

"The sentiment is people would like to be bullish, but they are waiting for that catalyst, the fiscal cliff or maybe more indication that the economy is turning around. Once that happens, we suspect it could feed upon itself and the market could go significantly higher in 2013," Michael said.

(Additional reporting by John Tilak; Editing by Peter Galloway)

Source: http://news.yahoo.com/tsx-may-open-lower-uncertainty-over-u-budget-132057898--finance.html

fox 8 news indy 500 angelina jolie leg daytona artie lange nascar daytona 2012 kasey kahne