TSX closes near two-week low, hurt by oil, banks
By Alastair Sharp
TORONTO (Reuters) - Canadian stocks dropped sharply on Thursday as investors pared back expectations the U.S. Federal Reserve will signal a new round of economic stimulus, brushing off surprisingly robust earnings from three of the country's big banks.
All ten of the benchmark index's main sectors were lower ahead of the much anticipated speech by Fed Chairman Ben Bernanke at a meeting of central bankers in Jackson Hole, Wyoming on Friday.
"The market is expecting that we won't necessarily get anything definitive tomorrow out of Jackson Hole, or if we do, that it's already reflected in equity valuation levels," said Paul Taylor, the chief investment officer of fundamental equities at BMO Asset Management.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 123.14 points, or 1.03 percent, to 11,886.65. It was the biggest one-day fall for the index since early July.
The index at one point hit 11,875.05, its weakest level since August 15.
Limp data on the U.S. labor market coupled with signs that consumer spending remains steady added to the pessimism as it neither pointed to a robust recovery nor a bleak environment in which the Fed would be forced to act.
"In some ways you hope that economic data is weak enough that it forces the Fed's hand. The risk is that it's a little bit better than awful and therefore the Fed is not compelled to intervene," Taylor said.
ENERGY LEADS DECLINE Continued...