CANADA STOCKS-TSX stays positive, but rally ebbs
* TSX up 8.41 pts, or 0.1 pct, to 12,505.37 * Touches two-week high at 12,561.75 * Energy, materials boost index * Soft U.S., Canada data weigh * Greek debt fears re-emerge By Jon Cook TORONTO, March 19 (Reuters) - Toronto's main stock index was slightly higher midday on Monday in choppy trade, driven by gains in resource shares, but soft U.S. and Canadian data and concerns over a looming Greek debt auction threatened to stem the recent rally. A spate of recent positive data has increased investor confidence in the U.S. economic recovery and sparked last week's sell-off in Canadian government bonds and U.S. Treasuries. "You've got a broad-based rally here," said Pat McHugh, Canadian equity strategist at Manulife Asset Management. "Bonds are looking vulnerable." Bonds tend to be viewed as a safe haven, rising in times of economic turmoil and falling as risk sentiment improves. Canadian and U.S. bond yields, which move inversely to prices, have gradually risen since hitting ultra-low levels late last year as Europe's escalating debt crisis drove a bid for safety. On Monday, the Canadian 10-year bond yield was close to a five-month high, a reflection, McHugh said, of increased confidence by fixed-income investors in the North American economy. Around noon, the Toronto Stock Exchange's S&P/TSX composite index was up 8.41 points, or 0.1 percent, to 12,505.37. Earlier it touched a two-week high at 12,561.75. Seven of the TSX's 10 main sectors were higher, led by energy issues, which climbed 0.3 percent as Brent crude oil traded above $125. Suncor Energy was the most influential gainer, up 1.7 percent at C$33.48. Higher gold and metals prices boosted shares of Canadian Natural Resources, up 0.4 percent to C$35.19, and Goldcorp, which rose 0.2 percent to C$43.78. Kinross Gold shares rose 0.9 percent to C$9.99. Some bankers see the company, the world's seventh-largest gold miner, as Canada's biggest takeover target because of its low share price, Reuters reported. But the recent equities rally hit a speed bump on Monday after separate data showed that U.S. homebuilder sentiment was unchanged in March, disappointing expectations for a small rise, and Canadian wholesale trade slumped in January. In Europe, an auction to determine insurance payouts on Greek sovereign bonds showed that investors fear for the country's financial future even after a debt restructuring and aid packages. "We're not out of the woods yet when it comes to Greece," said McHugh. Canadian financial shares were down 0.2 percent, led by Royal Bank of Canada, which fell 0.2 percent to C$57.92. In company news, shares of Viterra, Canada's biggest grain handler, fell 1.1 percent to C$16.01 after it said on Monday it was in exclusive talks with a prospective buyer. Viterra did not identify the suitor, but industry sources have said Swiss-based commodities trader Glencore is developing a bid that would involve Canadian grain handler Richardson International Ltd and farm retailer Agrium Inc . (Editing by Leslie Adler)
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