TSX drops on Fed worries, posts third straight weekly drop

Fri Aug 9, 2013 4:46pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index slipped on Friday to record a third straight weekly decline as concerns about potential monetary policy tightening by the U.S. Federal Reserve overshadowed positive economic signals from China.

Investors also tried to digest data showing unexpected weakness in the Canadian labor market in July, hurt by job losses in the public sector and scarce opportunities for young people.

Separate data indicated Chinese factory output growth in July was the strongest since the start of the year, a sign that the world's second-largest economy may be stabilizing.

Shares of BlackBerry Ltd (BB.TO: Quote) jumped almost 6 percent after several sources told Reuters that the smartphone maker is looking at the possibility of going private.

But the market pendulum swung back once again to the Fed's plans for its massive stimulus program.

Investors have been anxious about when the U.S. central bank might take its foot off the gas pedal, and recent signs have been pointing to an imminent easing of bond buying.

"The volatility that we're seeing in the North American equity markets will likely be high over the next couple of months," said Shailesh Kshatriya, associate director for client investment strategies at Russell Investments Canada.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 10.79 points, or 0.09 percent, at 12,542.13. The index lost 0.5 percent for the week.   Continued...

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