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TORONTO (Reuters) - Toronto's main stock index ended slightly lower on Wednesday as commodity markets dropped broadly, but stronger financials and a series of deals in the consumer, health and mining sectors put a firm floor under losses.
Among the most influential laggards, Goldcorp Inc (G.TO) lost 2 percent to C$40.51, Potash Corp (POT.TO) fell 1.5 percent to C$42.86, and Canadian Natural Resources (CNQ.TO) slipped 1.4 percent to C$32.20.
The prices of oil, gold and other resources were down on mixed factors including a rise in inventories, lackluster demand and some disappointing earnings from several U.S. bellwether companies. .N
European debt concerns also flared up again a day ahead of a critical bond sale in Spain, seen as a test of Madrid's capacity to grapple with financial and budgetary pressures.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 8.05 points, or 0.07 percent at 12,128.89. Six of the 10 sectors, however, were firmer, including financials, up 0.3 percent.
"When you look at the price/earnings multiples on the Canadian banks and the current dividend yields and you compare them to a different sector, say the public utilities or the pipelines, they offer good relative value and comparable or higher yield," said Arthur Salzer, chief executive officer of Northland Wealth Management.
"And if you are an investor that thinks Europe will muddle their way through and that we're not going to have another 2008 credit meltdown, then the banks are attractive and we have been buying here on dips."
A slew of mergers and acquisitions led to other bright spots on the index. Canada's Alimentation Couche-Tard Inc (ATDb.TO), which operates convenience store chains in Canada and the United States, jumped 15.5 percent to C$39.60 after it struck a deal to buy Norwegian company Statoil Fuel and Retail ASA SFRET.OL for 15.9 billion crowns ($2.8 billion).
"Investors like the deal, they see something there in terms of a dramatic increase in earnings that could happen," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
"I'm always nervous when companies go out of their core competency, they know the North American economy, they know how that works ... and then all of a sudden they announce this out-of-nowhere deal."
SXC Health Solutions Corp SXCI.O SXC.TO rallied 11.3 percent to C$88.63 after it said it will buy rival U.S. pharmacy benefit manager Catalyst Health Solutions Inc CHSI.O for about $4.4 billion.
Ivanhoe Mines (IVN.TO) IVN.N surged nearly 16 percent to C$13.49 after its founder and Chief Executive Robert Friedland agreed to step down as part of a financing deal with its majority shareholder Rio Tinto (RIO.L) (RIO.AX) that will help fund construction of the Oyu Tolgoi copper-gold project in Mongolia.
In other company news, Valeant Pharmaceuticals International Inc (VRX.TO) (VRX.N) edged up 0.8 percent to C$54.83 after announcing it will buy certain assets from Atlantis Pharma, a branded generic pharmaceutical company, for about $71 million, to expand its footprint in Mexico.
Canada's third-largest grocery store operator, Metro Inc (MRU.TO), reversed earlier gains after reporting a higher quarterly profit, and ended the day down 0.4 percent to C$53.40.
WestJet Airlines (WJA.TO) rose 2.5 percent to C$14.53 after it reached a deal with Thomas Cook Group (TCG.L) to be the exclusive airline for the UK travel group's tour operator business in Canada this coming winter, wresting the business from a competitor.
Editing by James Dalgleish