TSX retreats on euro zone worries, BMO results

Tue Dec 6, 2011 5:14pm EST
 
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By Jennifer Kwan

TORONTO (Reuters) - Toronto's main stock index ended weaker on Tuesday as investors stayed nervous about the stability of the euro zone and as disappointing quarterly results from Bank of Montreal BMO.TO pressured the index's hefty financial sector.

Financial shares shed 1.3 percent and led the market lower. Bank of Montreal, Canada's fourth largest bank, was the most heavily weighted decliner, falling 3.5 percent to C$57.74 after reporting quarterly results that missed analysts' expectations.

"They've disappointed on their earnings where most of the other banks have impressed," said Julie Brough, vice president at Morgan Meighen & Associates.

BMO is the first Canadian bank this quarter to miss consensus estimates, though shares of the other banks have hardly benefited from their strong performances due to a murky 2012 outlook and the European debt crisis.

Elsewhere in the sector, Bank of Nova Scotia BNS.TO dropped 0.9 percent to C$47.89, while Royal Bank of Canada RY.TO fell 1.6 percent to C$48.50.

The Toronto Stock Exchange's S&P/TSX composite index ended the day down 38.08 points, or 0.31 percent, at 12,081.25. Eight of its 10 sectors were lower.

Uncertainty about developments in the euro zone continued to pressure the market. Standard & Poor's fired its second warning shot in 24 hours at the euro zone, threatening on Tuesday to cut the credit rating on its financial rescue fund as European leaders raced to find a political solution to the debt crisis.

The index crept into positive territory briefly at mid-afternoon, largely on the back of its commodity-linked materials sector, which ended the day 1.6 percent higher.   Continued...

 
<p>Two men walk down the street from the King and Bay intersection in the financial district in Toronto February 22, 2011. REUTERS/Mark Blinch</p>