Energy stocks, Bombardier drag TSX to five-week low

Thu Feb 21, 2013 4:55pm EST
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By John Tilak

TORONTO (Reuters) - Canada's benchmark stock index dropped to a five-week low on Thursday, led by energy and financial shares, as a bigger-than-expected rise in U.S. weekly jobless claims and surprisingly weak euro zone economic data weighed.

Bombardier Inc (BBDb.TO: Quote) was also a major drag on the market. Its shares fell about 9 percent after the plane maker reported a sharp drop in quarterly profit.

"There is a bit of worry creeping into the market. I wouldn't be surprised if the market was to take a pause here or pull back even," said Michael Sprung, president of Sprung Investment Management.

The market could slip as much as 10 percent in the event of a correction, he added.

Strategists have said the Canadian stock market could be set for a near-term pullback after a rally that took it to 18-month highs, with resource shares seen as especially vulnerable.

"There is a bit of pessimism," said Irwin Michael, portfolio manager at ABC Funds. "The market has had a nice run."

Canadian shares followed U.S. and global stocks lower after a raft of U.S. data, from claims for jobless aid to factory activity and consumer prices, pointed to slow economic growth. Euro zone purchasing managers' data for February pointed to continued weakness in that region. <MKTS/GLOB>

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 74.08 points, or 0.58 percent, at 12,639.97. It earlier touched 12,602.54, its lowest point since January 16.   Continued...

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