CANADA STOCKS-TSX shrugs off U.S., Europe worries
* TSX ends up 4.6 pts, or 0.04 pct, at 11,330.68 * Gold miners lead gains; financials fall * Weak U.S. data boosts hopes of further Fed stimulus * Greek, Spain bank woes weigh on market By Jon Cook TORONTO, May 17 (Reuters) - Canadian stocks ended a four-session slide on Thursday, eking out a modest gain, as a strong performance from gold miners offset financial losses on soft U.S. economic data and mounting worries about Greece and Europe's fragile banking sector. Canada's sub-index of gold mining firms jumped nearly 6 percent as gold rallied for its largest one-day gain since late January. Gold's move allowed the Toronto Stock Exchange's S&P/TSX composite index to outperform U.S. stocks, which hit a four-month low on Thursday. "We've performed better than the U.S. markets today, which has not been the case for much of 2012 to this point," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis. Canada's top gold producers, Barrick Gold and Goldcorp, led the day's gains, both rising 6.9 percent to finish at C$38.16 and C$35.48, respectively. Smaller miners also jumped, with Eldorado Gold rising 5.8 percent to C$11.01 and Yamana Gold climbing 4.5 percent to C$13.79. Gold was also boosted by Wednesday's release of the U.S. Federal Reserve's minutes from its most recent meeting in which policymakers kept alive the possibility of a fresh round of monetary stimulus for the moderately expanding U.S. economy. "Gold for a very long time now has been reflecting the extremely easy monetary policies of the Fed and other central banks around the world," said Fehr. Weak U.S. data on Thursday supported the case for further monetary easing. The Philadelphia Federal Reserve Bank said its index gauging factory activity in the U.S. Mid-Atlantic region unexpectedly dropped to a reading of minus 5.8 in May, indicating contraction and the lowest level since last September. Meanwhile, new U.S. jobless claims were flat at 370,000, slightly disappointing market expectations. The TSX finished virtually flat, up a mere 4.6 points, or 0.04 percent, at 11,330.68. It touched a session high at 11,421.83, a day after hitting a seven-month low at 11,298.46. Thursday's gains were muted by jitters over political turmoil in Athens, where politicians rejecting harsh austerity measures are likely to win June 17 elections. Wednesday's move by the European Central Bank to stop providing liquidity to some Greek banks added to the pressure. "What's dominating the markets is fear of an uncontrolled Greek exit from the euro," said Fergal Smith, managing market strategist at Action Economics. Worries about Spanish banks also resurfaced after a media report said customers of Bankia had withdrawn more than 1 billion euros ($1.27 billion) from their accounts in the past week. The Spanish government said there had been no such exit of deposits. Canadian financial issues, which could be vulnerable if Greece were to suffer a disorderly default, fell 1.6 percent. Toronto-Dominion Bank slid 1.6 percent to C$77.65 and Royal Bank of Canada shed 2 percent to C$51.96. RBC's drop came after a report that Canada's largest bank was among a group of suitors which have put in initial bids to buy the non-U.S. wealth management business of Bank of America in a deal that could be worth about $2 billion, sources said. Smith saw Thursday's boost being short-lived and expected the TSX would eventually test last year's low of 10,848.19, reached on Oct. 4, before staging a larger rally. "The market will see increased support as that trough comes into view."
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