Potash Corp drop drags TSX lower, focus turns to Fed
By John Tilak
TORONTO (Reuters) - Canadian stocks fell on Tuesday as slumping Potash Corp (POT.TO: Quote) shares offset gold-miner gains, but market attention was locked on what Federal Reserve Chairman Ben Bernanke might say on Wednesday about the U.S. central bank's stimulus program.
Potash, the world's biggest fertilizer producer, dropped 3.3 percent after disappointing results from rival Mosaic Co (MOS.N: Quote) reflected falling potash prices and raised concerns about demand. Potash's fall was the biggest negative influence on the index.
The market also processed mixed U.S. earnings reports as well as data that showed U.S. consumer prices rose in June, while underlying inflation pressures were stabilizing.
Investors awaited congressional testimony from Bernanke to try to get a sense of when the Fed will begin to dial back its bond-buying program. Bernanke's comments last week that the Fed's stance would stay accommodative drove global markets to record levels.
"People are stalled at this point, waiting for the next catalyst," said Diana Avigdor, portfolio manager and head of trading at Barometer Capital Management.
"Bernanke is pretty good at managing expectations," she added. "The market is hoping that he will reiterate his message last week that it's going to be a long, long time before the accommodative policy ends."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 11.46 points, or 0.09 percent, at 12,516.89. The benchmark Canadian index, which is up slightly on the year, has sharply underperformed the S&P 500 .SPX this year.
"Given the shakeout we've seen in the commodities sector in the last year or two, it will take some time before global fund managers come back, but the ‘sell Canada' theme is now on hold," Avigdor said. Continued...