TSX drops to six-week low on bank results, Fed fears
By John Tilak
TORONTO (Reuters) - Canada's main stock index dropped to a six-week low on Thursday after results from major banks weighed on financial shares and strong U.S. economic data heightened expectations that the Federal Reserve will scale back its monetary stimulus program.
Shares of Royal Bank of Canada (RY.TO: Quote) and Toronto-Dominion Bank (TD.TO: Quote) fell after Canada's two biggest lenders reported quarterly results. RBC also said Chief Executive Gordon Nixon will step down next summer after 13 years in his position.
Market focus returned to speculation about when the Fed would begin rolling back, or tapering, its bond buying program after a string of positive U.S. economic numbers this week strengthened the case for a Fed pullback.
On Thursday, a report showed the U.S. economy grew faster than initially estimated in the third quarter as businesses accumulated stock.
The Toronto stock market's benchmark index fell for a third straight session on Thursday, with all of its sectors in negative territory. The benchmark, however, has gained in each of the past five months.
"It's more of the markets taking a little bit of a breather here than going into a significant correction," said David Cockfield, managing director and portfolio manager at Northland Wealth Management.
"You still have the underlying fear on the part of portfolio managers of being caught fully invested just when the market decides to really tank," he added.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed 104.52 points, or 0.79 percent, lower at 13,200.40, its lowest since October 22. Continued...