TSX drops as miners weaken, focus on U.S. earnings

Mon Jan 7, 2013 5:23pm EST
 
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By Solarina Ho

TORONTO (Reuters) - Canada's main stock index retreated on Monday as mining stocks were pressured by softer gold prices and investors braced for the upcoming U.S. fourth-quarter earnings season.

The Toronto Stock Exchange's S&P/TSX composite index's .GSPTSE fall tracked declines on U.S. stock markets as cautious investors cashed in recent gains ahead of the earnings season. The U.S. results are expected to be only marginally stronger than the previous quarter's lackluster performance. .N<MKTS/GLOB>

"We're in earnings season in the U.S. That might cause some kind of hesitation," said Michael Gayed, chief investment strategist at Pension Partners.

Gold prices slipped as investors eyed the outlook for U.S. budget talks and the U.S. Federal Reserve's quantitative easing program. Two top Fed officials suggested on Friday the central bank may halt its bullion-friendly asset purchases by the end of the year due to an improving economy.

The Toronto index's materials group, where miners reside, finished 0.97 percent lower. <GOL/>

"There's going to be some kind of noise near term, most of it due to the concern about the (U.S. budget) debt ceiling coming up. That's going to cause some near-term back and forth movement," Gayed said.

The index's energy group gave back 0.65 percent as oil prices steadied after retreating earlier in the session. TD Securities downgraded several Canadian oil and gas companies.

The S&P/TSX composite index finished down 41.26 points, or 0.33 percent, at 12,499.55. Eight of its 10 main sectors fell.   Continued...

 
A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch