The Toronto stock market sold off Wednesday after U.S. president Barack Obama again insisted that higher tax payments will have to be part of any deal to save the U.S. economy from going over the so-called fiscal cliff at the end of the year.

That dimmed hopes for a quick resolution of the crisis since those higher taxes are strongly opposed by congressional Republicans.

The S&P/TSX composite index dropped 204.87 points 11,929.79, leaving the main index down about 25 points below where it started the year. The TSX Venture Exchange fell 28.2 points to 1,258.69.

The Canadian dollar lost 0.19 of a cent to 99.62 cents US. U.S. indexes also tumbled with losses accelerating after Obama's afternoon news conference.

"The Street was looking for him to say some magic buzzwords about avoiding the fiscal cliff, about co-operation," saids Sal Arnuk, of New Jersey-based Themis trading, noting Obama's comments were instead "very consistent with some unyielding positions he's had over the years."

The Dow Jones industrials plunged 185.23 points to 12,570.95, the Nasdaq dropped 37.08 points to 2,846.81 while the S&P 500 index backed off 19.04 points to 1,355.49.