Fed speculation, commodity price drop weigh on TSX

Tue Nov 12, 2013 5:17pm EST
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By John Tilak

TORONTO (Reuters) - Canada's main stock index dropped on Tuesday as worries that the U.S. Federal Reserve might cut back its stimulus program weighed on commodity prices, hitting heavyweight energy and materials shares.

Investors also digested news that China's ruling party pledged to let markets play a "decisive" role in allocating resources as it unveiled a reform agenda for the next decade.

Meanwhile, a slew of economic data unveiled last week, including robust U.S. jobs numbers, continued to spark fears that the Fed might scale back its stimulus measures.

Fed Vice Chair Janet Yellen is expected to be nominated in a U.S. Senate Banking Committee hearing on Thursday to replace Ben Bernanke at the helm of the central bank.

"The market is waiting for (Yellen) to take over and see what she's going to do about the economy," said Ron Meisels, technical analyst and president of Phases & Cycles, who does not expect any dramatic change in Fed policy.

The Canadian market declined for a second straight session after jumping about 4 percent in the past month.

"Toronto had a fantastic rise from early October, and some of the stocks here in Canada are getting a little bit tired," Meisels said. "I will not be surprised if there's a bit of a correction."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 32.35 points, or 0.24 percent, at 13,326.04.   Continued...

An electronic board displays the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch