TSX edges lower as energy shares weaken after Fed

Wed Jun 20, 2012 5:25pm EDT
 
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By Allison Martell

TORONTO (Reuters) - Toronto's main stock index edged down on Wednesday, led lower by energy stocks, which tracked a decline in oil prices after the U.S. Federal Reserve extended a program to stimulate the economy but stopped short of more aggressive measures.

The Fed said it would extend long-term bond-buying through "Operation Twist" but stopped well short of further quantitative easing. Still, Fed Chairman Ben Bernanke said the central bank was concerned Europe's prolonged debt crisis was dampening U.S. economic activity and employment.

"Everything was Bernanke-related, and to a large extent the result of the strong day that we had yesterday," said Pat McHugh, Canadian equity strategist at Manulife Asset Management. "Yesterday we overreacted in terms of anticipating something from the Fed."

Canadian stocks hit a five-week high on Tuesday, as financial and energy shares rallied on hopes the Fed would announce further monetary stimulus.

"We had a very good day yesterday, especially in Toronto, and I think today maybe it's just more of the malaise that we've had for quite awhile here," said John Kinsey, portfolio manager at Caldwell Securities Ltd.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 29.02 points, or 0.25 percent, at 11,759.34.

The heavyweight energy group, down 1.3 percent, played the biggest role of any sector in leading the market lower. Oil prices slid after data showed U.S. crude inventories unexpectedly rose and traders were disappointed by the Fed announcement.

Suncor Energy (SU.TO: Quote) was down 1.7 percent at C$29.65, and Canadian Natural Resources (CNQ.TO: Quote) fell 1.9 percent to C$28.30. The two companies played the biggest role of any two stocks in leading the Toronto market lower.   Continued...

 
People walk by a Bay Street sign inside the financial district in Toronto October 10, 2008. REUTERS/Mark Blinch