TSX tumbles on Europe worries despite Spain deal
By Jon Cook
TORONTO (Reuters) - Canadian stocks fell for the third straight session on Monday, led by energy and mining shares, after a relief rally on the rescue package for Spain's banks fizzled as investors worried that other euro zone countries also will need assistance.
Markets initially rose after euro zone policymakers agreed to lend Spain, the region's fourth-largest economy, up to 100 billion euros ($124.67 billion) to help prevent a run on the banks.
But equity markets retreated and Spanish and Italian bond yields rose on worries that existing bondholders could face losses in a debt restructuring if the euro zone's permanent bailout fund is used for the rescue.
"In a bear market, which we are in, any news is perceived as lousy news," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services. "The market wants to see a full-blown solution and any type of piece-meal solution is going to be turned around and considered negative."
Nine of Canada's 10 main sectors finished in the red. Losses were led by the heavyweight energy group, which fell 1.6 percent as oil prices reversed early gains to finish down more than $1 a barrel. <O/R>
The materials sector, which includes miners, fell 1.3 percent as gold mining shares slumped with bullion prices as nervous investors opted for low-yielding government bonds. <GOL/>
The most influential decliners included Barrick Gold (ABX.TO: Quote), which dropped 1.3 percent to C$39.60, Goldcorp Inc (G.TO: Quote), off 0.8 percent at C$39.95, Potash Corp (POT.TO: Quote), down 1.2 percent to C$38.87, and Teck Resources TCKb.TO, which dropped 2.6 percent to C$31.25. Continued...