CANADA STOCKS-TSX rally fizzles as Greek fears mount

Wed May 16, 2012 2:36pm EDT
 
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* TSX down 35.75 pts, or 0.3 pct, at 11,307.30
    * Touches 2012 low at 11,305.62 as energy, financials weigh
    * ECB may stop funding of some Greek banks


    By Jon Cook	
    TORONTO, May 16 (Reuters) - Toronto's main stock index
turned lower on Wednesday as early resource gains were erased
following a report that the European Central Bank had stopped
funding operations for some Greek banks rekindled fears about
the euro zone's fragile banking sector.	
    Euro-zone central bank sources said the ECB stopped monetary
policy operations with some Greek banks as they have not been
successfully recapitalized. Investors have been on tenterhooks
over fears of a Greek exit from the euro zone and its knock-on
effect on the global financial system. 	
    Market anxiety lingered as the problems in Europe were "not
being resolved with any great vigor," said Robert McWhirter,
president and portfolio manager at Selective Asset Management
Inc.    	
    Canadian stocks pared early gains from encouraging U.S.
economic data that showed U.S. industrial production posted its
fastest growth in over a year in April. Separate housing numbers
revealed a rebound in groundbreaking for new homes.	
    Losses were led by the heavyweight energy sector, which
dipped 0.4 percent.	
    Prominent decliners included Suncor Energy, down 0.8
percent to C$27.44, Canadian Natural Resources, which
fell 0.5 percent to C$29.28, and Cenovus Energy,
sliding 0.9 to C$31.48.	
    Financial stocks edged down 0.3 percent, shrugging off
efforts by German Chancellor Angela Merkel and new French
President Francois Hollande to quell talk of a possible Greek
exit from the euro zone.	
    Bank of Nova Scotia was the biggest laggard, down
0.5 percent to C$52.39. Top insurer Manulife Financial 
fell 2.5 percent to C$11.35.	
    Around 1:37 p.m. (1737 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 35.75 points, or 0.3
percent, at 11,307.30. It touched a 2012 low at 11,305.62.	
    The index was on track to fall for the tenth time in 11
sessions, shedding more than 8 percent so far this month.	
    Gainers were led by the mining stocks.	
    "The price of gold stocks relative to gold and metals is
attractive," said McWhirter.	
    Barrick Gold climbed 1 percent to C$35.60 and
Yamana Gold rose 2.3 percent to C$13.15. Other miners
on the upside included First Quantum Minerals, which
spiked 5.1 percent to C$17.70, Inmet Mining, jumped 3.1
percent to C$46.95, and Osisko Mining Corp rose 5.3
percent to C$6.7.	
    But Alacer Gold Corp shares fell 12.4 percent to
C$5 after it raised its cash cost outlook for 2012 and two
brokerages cut their price target on the stock. 	
    Earlier Wednesday, data showed Canadian factory sales blew
past expectations in March with the biggest gain in six months
on vigor in the oil industry, putting the economy back on a
growth track after a surprise contraction in February.
 	
    West Fraser Timber Co Ltd climbed 5.5 percent to
C$45 after investment firm Raymond James raised the Canadian
lumber company's stock to "outperform".