CANADA STOCKS-TSX shrugs off U.S., Europe worries

Thu May 17, 2012 5:37pm EDT
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* 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 slender 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 notched its largest one-day gain since late
    The move in gold helped the Toronto Stock Exchange's S&P/TSX
composite index 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, Missouri.	
    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
    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. A gauge of future U.S. economic activity fell
in April for the first time in seven months, and the
Philadelphia Federal Reserve Bank's business conditions index
fell to its lowest level since September. U.S. jobless claims
also underwhelmed.  	
    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. Sentiment had indicated that politicians who
reject harsh austerity measures were likely to win the June 17
elections, but a poll on Thursday showed the conservative New
Democracy Party in the lead. Wednesday's move by the European
Central Bank to stop providing liquidity to some Greek banks
contributed 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, the partly
nationalized lender, 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 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.	
    Royal Bank of Canada, Canada's largest bank, is among a
group of suitors that have made 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."	
    In other news, shares of Canadian Pacific Railway Ltd
 rose 0.9 percent to C$76.51 after Chief Executive Fred
Green resigned following a bitter proxy battle with New York
activist shareholder William Ackman on Thursday, clearing the
way for a management overhaul at the country's second-biggest
    Sears Canada shares plummeted nearly 13 percent to
C$11.45 after parent company Sears Holdings Corp said
on Thursday it will spin off a large part of its stake in its
Canadian unit. 	
    Pan American Silver Corp surged 8.6 percent to
C$16.38 as the price of silver rose more than 4 percent
on Thursday after having fallen for eight straight days.
    Shares of Research In Motion Ltd were up nearly 4
percent at C$11.61 after the struggling smartphone maker said
the UK agency responsible for setting standards for computer
security has approved the BlackBerry 7 operating system for
government use.