CANADA STOCKS-TSX falls as U.S. talks make investors nervous

October 15, 2013

* TSX down 17.51 points, or 0.13 percent, at 12,875.67

* U.S. debt negotiations key to investor sentiment

* Lower commodity prices weigh on resource-rich Canada index

By Alastair Sharp

TORONTO, Oct 15 (Reuters) - Canada's main stock index slipped slightly in early trade on Tuesday, as nervous investors looked to Washington for progress on fiscal negotiations to avert a damaging U.S. debt default.

Hopes of a deal rose after U.S. Senate Majority Leader Harry Reid, a Democrat, and his Republican counterpart, Mitch McConnell, ended a day of talks on Monday, with Reid saying they had made "tremendous progress".

"I suspect something will happen on the positive side (in U.S. fiscal negotiations) but in the meantime the market is very nervous," said Irwin Michael, portfolio manager at ABC Funds.

Commodities were broadly lower, pushing the resource-heavy Toronto Stock Exchange's S&P/TSX composite index down 17.51 points, or 0.13 percent, at 12,875.67. It had opened in the black then fallen sharply in the first hour of trade before recovering somewhat.

"It's very thin, very volatile, and all eyes are on Washington," Michael said.

Gold miners were weaker, as optimism that U.S. lawmakers could avert a default dragged prices of safe-haven bullion to three-month lows.

Goldcorp Inc fell 1.2 percent to C$24.14, while Barrick Gold Corp gained 0.5 percent to C$17.90.

Pipeline operator Enbridge Inc declined 1.6 percent to C$42.28, while Talisman Energy Inc fell 2.2 percent to C$12.43.

BlackBerry Ltd gained 0.7 percent to C$8.41. The struggling smartphone company on Tuesday issued an open letter to its customers and partners in a string of newspapers in a bid to reassure them.