October 29, 2014 / 11:30 AM / 3 years ago

TSX falls as gold miners dive after Fed comments

3 Min Read

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.Mark Blinch

TORONTO (Reuters) - Canada's main stock index dropped on Wednesday as gold-mining shares fell with bullion prices after the U.S. Federal Reserve offered an upbeat outlook for jobs and ended its stimulative bond-buying program.

The U.S. central bank closed its monthly asset purchase program and dropped a characterization of U.S. labor market slack as "significant" in a show of confidence in the economy's prospects.

Bullion, which tends to lose its allure as a safe-haven asset when there are bullish economic signals, dived 1.5 percent. Shares of gold miners dropped 4.4 percent.

Investors also digested earnings reports from miners Cameco Corp (CCO.TO) and Teck Resources Ltd TCKb.TO. Cameco shares dropped 3.3 percent to C$18.92 after the uranium producer said it expected full-year revenue to fall by up to 5 percent due to labor problems at mines.

"Some companies have disappointed, some have managed to hurdle over a pretty low bar as far as earnings expectations (go)," said Elvis Picardo, a strategist at Global Securities in Vancouver.

"On the plus side, Teck, which has really been beaten down in the last few weeks, came out with pretty solid numbers all things considered," Picardo said.

Teck rose 1.8 percent to C$18.16 after the miner reported adjusted third-quarter earnings that topped market expectations.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 96.68 points, or 0.66 percent, at 14,527.57.

The benchmark index has been hit over the past month by worries about Fed policy, choppy oil prices and sluggish global economic growth. It is down nearly 3 percent so far this month.

Eight of the 10 main sectors on the index were in the red on Wednesday.

Among gold miners, Barrick Gold Corp (ABX.TO) shed 5 percent to C$14.34, and Goldcorp Inc (G.TO) was down 4.2 percent at C$24.04.

Financials, the index's most heavily weighted sector, slipped 0.4 percent. Royal Bank of Canada (RY.TO) gave back 0.4 percent to $79.13, and Toronto-Dominion Bank (TD.TO) declined 0.7 percent to C$54.37.

Horizon North Logistics Inc (HNL.TO) plunged 28 percent to C$3.32, after the company reported quarterly results and gave an outlook late on Tuesday.

Editing by W Simon; and Peter Galloway

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