The Toronto stock market was lower Friday amid growing skepticism about whether U.S. lawmakers can keep the economy from going over the so-called fiscal cliff.

The S&P/TSX composite index dropped 44.55 points to 12,329.22 as the clock ticks towards huge spending cuts and significant tax increases that will automatically click in after Dec. 31 if there's no deal.

The American economy is already weak and economists warn the imposition of those measures could tip the U.S. back into recession and depress other economies around the globe unless the White House and Congress find a compromise budget plan.

The TSX Venture Exchange slipped 0.54 of a point to 1,196.21.

The Canadian dollar was down 0.07 of a cent at 100.44 cents US.

U.S. markets were also lower with the Dow industrials down 60.89 points to 13,035.42, the Nasdaq dropped seven points to 2,978.91 and the S&P 500 index declined 6.09 points to 1,412.01.

3 p.m. meeting

Congressional leaders and President Barack Obama are expected to meet at 3 p.m. ET today at the White House for last-minute talks. Obama and congressional Democrats want a deal that would let tax rates rise for the wealthiest taxpayers, a measure opposed by Republicans.

Traders also took further indications of an improving housing sector as a measure of Americans who signed contracts to buy homes increased last month to its highest level in two and a half years.

The U.S. National Association of Realtors says its seasonally adjusted pending home sales index rose 1.7 per cent in November from October to 106.4.

The increase points to higher sales of previously occupied homes in the coming months. There's generally a one-to-two-month lag between a signed contract and a completed sale.

Stock markets headed for a negative end to a shortened trading week as top lawmakers alternately cast blame on each other while portraying themselves as open to a reasonable last-minute bargain.

Miners, industrials slip

Commodities were mixed with March copper unchanged at $3.60 US a pound. The mining sector fell 0.7 per cent with HudBay Minerals down 12 cents to $9.86 Cdn and First Quantum Minerals gave back 34 cents to $21.15.

The industrials sector was down 0.5 per cent with Bombardier Inc. down two cents to $3.74.

The energy sector also dropped 0.5 per cent with February crude on the New York Mercantile Exchange down 21 cents to $90.66 US a barrel. Suncor Energy declined 37 cents to $32.25 Cdn while Canadian Natural Resources shed 14 cents to $28.35.

February gold declined $7 to $1,656.70 US an ounce while the gold sector declined 0.35 per cent. Barrick Gold Corp. faded 22 cents to $34.02 Cdn.

The financial sector was also a drag with Scotiabank down 91 cents to $57.58.

On the corporate front, Research In Motion Ltd. shares edged up 15 cents to $11.85. The BlackBerry maker has sold NewBay to mobile services company Synchronoss Technologies Inc. for $55.5 million US. NewBay's cloud-based services allow customers to store, share and deliver content like photo albums, social networking and other data, through smartphones, tablets and other electronic devices.

Europe slides

Worries about the U.S. economy put European bourses firmly in the red with London's FTSE 100 index down 0.35 per cent, Frankfurt's DAX gave back 0.57 per cent and the Paris CAC 40 was down 1.34 per cent.

However, Asian markets advanced as Tokyo's Nikkei 225 index rose 0.7 per cent to its highest level since March 10, 2011, the day that an earthquake and tsunami pummelled Japan's northeastern coast.

Investors have been cheering newly named Japanese Prime Minister Shinzo Abe and his calls for more public spending to reinvigorate the economy.

Hong Kong's Hang Seng rose 0.2 per cent, while South Korea's Kospi added 0.5 per cent. Australia's S&P/ASX 200 gained 0.5 per cent.