CANADA STOCKS-TSX tumbles on global growth fears, RIM

Wed May 30, 2012 11:34am EDT
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* TSX down 161.67 pts, or 1.4 pct, at 11,447.63
    * Energy, materials tumble on Spain, China woes
    * RIM's shares plunge 8 pct

    By Jon Cook	
    TORONTO, May 30 (Reuters) - Canadian stocks hit a one-week
low on Wednesday, led by mining and oil and gas firms, as risk
sentiment was hurt by a slew of bad news from Europe, China and
the United States, and Research In Motion's stock sank
after its surprise warning of a likely operating loss for its
fiscal first quarter.	
    Spain's central bank governor, who is stepping down early in
a storm over banking woes that pushed borrowing costs near the
unsustainable 7 percent level, said the government would miss
its deficit target this year. 	
    "The major issue here is Spain's ability to deal with bank
recapitalization and contagion," said Fergal Smith, managing
market strategist at Action Economics. "We're seeing spreads in
the euro zone blow out wider."	
    Unnerved by Spain's deepening financial crunch, investors
also pushed Italy's funding costs sharply higher at a bond sale,
with 10-year yields topping 6 percent for the first time this
    The news hammered Canada's struggling energy and mining
sectors. An oil and gas group index fell 3.2 percent and the
materials sector index, which includes miners, shed 0.7 percent.	
    Declines were led by shares of major oil and gas producers
Canadian Natural Resources, down 5.4 percent at
C$30.31, Suncor Energy, which fell 2.8 percent at
C$28.38, and Cenovus Energy, off 3.3 percent at C$32.	
    Miners on the downside included Teck Resources,
which slid 3.2 percent to C$31.48, Eldorado Gold, down
3.2 percent at C$11.51, and First Quantum Minerals, down
2.2 percent at C$17.90.	
    "Canada has a lot of economically sensitive stocks in the
materials and energy sectors so that's no big surprise that they
would be impacted the most," Smith said. 	
    At 11:31 a.m. (1531 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 125.67 points, or 1.1
percent, at 11,483.43, on track for its lowest close in a week.	
    Declines were stemmed after the European Commission threw
Spain two potential lifelines on Wednesday, offering more time
to reduce its budget deficit and direct aid from a euro-zone
rescue fund to recapitalize distressed banks. 	
    On Tuesday, markets rallied behind hopes that China would
boost its flagging economy with new spending measures, but these
were dampened on Wednesday by reports in the domestic media. An
article published on the website of the official Xinhua news
agency said China had no plan to repeat the powerful stimulus
measures used during the global crisis in 2008. 	
    The Thomson Reuters-Jefferies CRB index, a global
benchmark for commodities, fell 1.8 percent as oil, copper and
gold prices slid.   	
    Weak housing data from the United States also compounded the
gloomy global growth picture. U.S. pending home sales
unexpectedly fell in April to a four-month low. 	
    Also weighing on sentiment was RIM, whose shares plunged
more than 8 percent near an eight-year low at C$10.30 on
Wednesday, a day after the once iconic BlackBerry maker warned
it would likely report a shocking first-quarter operating loss.
    RIM said on Tuesday it hired bankers from J.P. Morgan
 and RBC Capital to help evaluate its strategic
options. But most analysts on Wall Street believe that an
outright sale of the company is unlikely.