U.S. data helps push TSX to lowest level in a month

Tue Feb 14, 2012 5:05pm EST
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By Jon Cook

TORONTO (Reuters) - Canadian stocks ended at their lowest level in nearly a month on Tuesday, undermining the big gains they made at the start of the year, as mining and energy issues slid on a fresh round of euro zone credit downgrades and on concern about slowing U.S. retail sales.

Market confidence in the U.S. economy slipped after data showed retail sales rose less than forecast in January as consumers cut back on car purchases and did less online shopping. Sales increased 0.4 percent in the month, the Commerce Department said, less than the 0.7 percent rise expected by economists polled by Reuters.

"People are extremely concerned about the degree to which consumers are extended at this point in time," said Michael Sprung, president of Sprung Investment Management Inc. "A soft sales number just goes to confirm that there's not a lot of capacity there."

The weak U.S. data had a more pronounced effect in Toronto than it did on U.S. stock markets. The Toronto index's heavyweight materials group fell nearly 1 percent on concern about falling U.S. demand for Canadian resources.

Losses were led by miner Barrick Gold (ABX.TO: Quote), which edged down 0.7 percent to C$47.64 as bullion prices slid with the euro after Moody's warned it may cut its triple-A credit ratings for France, Britain and Austria.

"It was a shot across the bow," said Robert Gorman, chief portfolio strategist at TD Waterhouse, of the Moody's warnings.

Also in the materials group, fertilizer producer Potash Corp (POT.TO: Quote) dropped 0.5 percent to C$44.45 and diversified miner Teck Resources TCKb.TO slipped 0.8 percent to C$38.97, hit by another drop in copper prices.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished down 44.22 points, or 0.36 percent, at 12,354.47, its lowest close since January 18.   Continued...

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