CORRECTED-TSX logs biggest one-day drop in two months

Thu May 3, 2012 5:15pm EDT
 
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* TSX down 215.22 points, or 1.8 pct, at 12,014.90
    * Biggest one-day drop since March 6
    * Materials sector falls as gold miners and gold prices sink
    * U.S. services-sector data weighs on market
    * Manulife shares lose 2.7 pct after earnings

    By Jon Cook	
    TORONTO, May 3 (Reuters) - Toronto's main stock index
suffered its largest single-day drop in nearly two months on
Thursday as mining and energy shares slid after weak U.S.
services-sector data raised concerns about the economic recovery
of Canada's largest trading partner.	
    All 10 of the index's main sectors were lower. The heavily
weighted materials group led losses, falling nearly 3 percent as
gold mining shares tumbled alongside bullion prices. 	
    Barrick Gold Corp, the world's top gold producer,
fell 3.3 percent to C$37.52 and Goldcorp Inc, the
country's second-largest producer, lost more than 4 percent to
C35.95.	
    "That takes a big bite out of the index because the gold
sector has a substantial weighting," said Fred Ketchen, director
of equity trading at ScotiaMcLeod.	
    Oil and gas companies' shares slipped between 2 percent and
3 percent as U.S. crude prices fell more than $2 a barrel. 
Suncor Energy slid 2.8 percent to C$31.32, and Cenovus
Energy dropped 1.9 percent to C$33.95.	
    The Toronto Stock Exchange's S&P/TSX composite index
 plunged 215.22 points, or 1.76 percent, to 12,014.90,
its biggest one-day drop since March 6.	
    The TSX accelerated losses after Thursday's report by the
Institute for Supply Management revealed the pace of growth in
the vast U.S. services sector slowed more than expected in
April. It followed Wednesday's ADP data that revealed U.S.
private-sector employment slowed last month. 	
     The ISM number countered earlier data on Thursday that
showed U.S. jobless claims fell more than expected last week,
giving mixed signals ahead of Friday's key U.S. non-farm
payrolls report for April. 	
    "If those numbers come out and they're a disaster, we'll
probably repeat what we see here today," Ketchen said.	
    The U.S. data overshadowed optimism from Europe, after
European Central Bank President Mario Draghi said the euro
zone's economy was likely to recover this year and debt-ravaged
Spain attracted good demand for some key bond auctions on
Thursday.  	
    "Today the market is being largely defined by what comments
we get out of the ECB, in terms of their potential to foster
more growth or become more accommodative with policies," said
Craig Fehr, Canadian market strategist at Edward Jones in St.
Louis. 	
    Canadian financial shares dove 1.2 percent, led by the major
banks. Toronto-Dominion Bank fell 1.1 percent to
C$81.71, Royal Bank of Canada was down 0.9 percent at
C$55.83 and Bank of Nova Scotia slid 1.3 percent to
C$53.29.	
     The shares of Canada's top two life insurers - Manulife
Financial Corp and Great-West Lifeco Inc - 
dropped after both reported stronger first-quarter results on
Thursday, but analysts and investors weren't impressed as they
looked ahead to what could be a gloomy second quarter.
 	
    Manulife shed 2.7 percent to C$12.98 and Great-West Lifeco
dropped 2 percent to C$24.32.	
    Valeant Pharmaceuticals International Inc. tumbled
9.1 percent to C$50.61 after at least one analyst cast doubts
about an earnings forecast that initially triggered a sharp rise
in the drug company's shares. 	
    In other news, BCE Inc shares were little changed
at C$40.31 after Canada's largest telephone company reported its
first-quarter profit grew 14 percent. On Wednesday, Canada's
Competition Bureau gave Bell and Rogers Communication Inc
 the go-ahead to buy a majority stake in Maple Leaf
Sports and Entertainment for C$1.32 billion ($1.34 billion).
Rogers' shares inched up 0.2 percent to C$36.68. 	
    Shares of construction firm SNC Lavalin Group Inc,
which is caught up in allegations of bribery and improper
payments, fell 1.9 percent to C$37.31 after it vowed on Thursday
to get to the bottom of any wrongdoing, but said the
transactions were still a mystery. 	
    TMX Group shares gained 1.3 percent to C$47.10 after
Maple Group said on Thursday it would accept a regulator's
conditions on its C$3.8 billion ($3.85 billion) bid for the
operator of the Toronto Stock Exchange.