TSX, Canadian dollar give back gains

Both the Toronto Stock Exchange's main index and the Canadian dollar gave back gains made earlier in the day to end lower Tuesday.

The loonie traded above parity for much of the morning but closed at 99.27 cents US, down 0.36 of a cent from Monday's close.

December gold built on Monday's record close by adding $6.90 to finish trading Tuesday at $1,410.10 US per ounce.

In Toronto, the S&P/TSX composite index lost 135.9 points, or one per cent, to 12,916.6.

Commodity stocks lost early momentum and the index was weighed down by losses in financial, telecom and base metal stocks.

In New York, the Dow Jones industrial average was down 60.1 points, or 0.5 per cent, to 11,346.8. The Nasdaq composite index slipped 17.07 points, or 0.7 per cent, to 2,562.98 while the S&P 500 index was down 9.85 points, or 0.8 per cent, to 1,213.4.

Traders worry about European debt

Traders have been concerned about European government debt and simmering tensions over currencies and trade gaps ahead of the meeting of G20 leaders Thursday and Friday. 

Emerging economies in particular are worried that the Federal Reserve's move to flood its sluggish economy with $600 billion US of cash will further devalue the greenback and give an advantage to cheaper American exports. 

At the same time, China has maintained tight control over its currency, the yuan, adding to criticism it is kept artificially low and gives Chinese exporters an unfair export advantage. 

Markets are also focused on Europe's ongoing debt problems and Ireland's ability to get its public finances in shape.

"The euro is lagging as sovereign concerns are lingering, most notable of which is the spectre of Irish debt default risk," said John Curran, senior vice-president at CanadianForex.

The growing worry in the markets is that Ireland's government may not be able to pass another bout of austerity measures on Dec. 7 and that as a result, it will have to seek financial assistance from its partners in the eurozone and the International Monetary Fund, as Greece had to earlier this year.