CANADA STOCKS-TSX drops with oil as US budget fears maintain grip
* TSX down 33.55 points, or 0.27 percent, at 12,352.15 * Index weighed down by energy, materials sectors By Allison Martell TORONTO, Dec 24 (Reuters) - Canada's main stock index edged lower in quiet Christmas Eve trading on Monday as oil prices extended their retreat on worries about U.S. 'fiscal cliff' budget measures, pulling down energy shares. With U.S. lawmakers suspending talks until after Christmas on avoiding the spending cuts and tax increases that could send the economy back into recession, the market was cautious. Trading volume was light ahead of an early close. "It's extremely quiet," said John Kinsey, portfolio manager at Caldwell Securities. "There's just nobody around." Kinsey, like most political experts and economists, expects a U.S. budget deal of some sort will come after Christmas. "They've been through this before, and they usually just kick the can down the road," he said. "Something's going to get down, not probably what I would like to see, but something is always done." There is no set date for talks to resume, and the two sides have only a few days between Christmas and Jan. 1, when $600 billion in spending cuts and tax increases start to take effect. At 10:53 a.m. (1553 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 33.55 points, or 0.27 percent, at 12,352.15. Trading volumes are expected to remain low, with both Canadian and U.S. equity markets scheduled to close at 1 p.m. (1800 GMT) ahead of Tuesday's Christmas holiday. Canadian markets will remain closed through Wednesday, Boxing Day. Energy shares fell 0.7 percent, as oil fell for a third day, and financials edged down 0.2 percent. The materials sector was down 0.5 percent as copper edged lower. The Thomson Reuters-Jefferies CRB Index, which tracks commodity prices, was down 0.28 percent. Chevron Corp's Canadian unit said it would buy a 50 percent stake in the Kitimat liquefied natural gas project and the proposed Pacific Trail Pipeline from EOG Resources Inc and Encana Corp. Encana fell 1.8 percent to C$19.76. Sears Canada Inc fell 0.7 percent to C$10.59 after it said its chief financial officer would resign effective Jan. 4. The company, majority-owned by Sears Holdings Corp is pushing for a turnaround after several quarters of precipitous declines in same-store sales. After Friday's close, SNC-Lavalin Group Inc said a client had given notice that it would terminate an engineering, procurement and construction contract. But SNC said it did not anticipate a material impact on fourth-quarter earnings. Its shares were up 1.4 percent at C$40.48.