CANADA STOCKS-TSX slumps on soft U.S. data, Europe

Thu May 31, 2012 11:32am EDT
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* TSX down 42.04 points, or 0.4 percent, at 11,391.18
    * Index down nearly 8 percent in May
    * Mining, energy shares lead losses
    * U.S. data, Spain stoke investor fears
    * CGI up nearly 13 percent after Logica deal

    By Jon Cook	
    TORONTO, May 31 (Reuters) - Canadian stocks dipped on
Thursday, led lower by mining and energy issues, as
disappointing U.S. data signaled the economy of Canada's largest
trading partner may have stalled and as fears lingered about the
state of the euro zone economy.	
    Six of Canada's 10 main sectors were down. Declines were led
by the heavyweight materials and energy groups, which both fell
nearly 1 percent as oil, gold and base metals prices slumped.
    "Just when you think they can't go any lower, they go
punishingly lower," said Barry Schwartz, vice president and
portfolio manager at Baskin Financial Services.	
    The most influential movers on the downside included top
fertilizer producer Potash Corp, which fell 1.1 percent
to C$40.17, copper miner Teck Resources, down 1.7
percent at C$30.75, Suncor Energy, which dropped 1
percent to C$27.75, and Canadian Natural Resources,
falling 1.2 percent to C$29.50.	
    The market has been preoccupied with the euro zone debt
crisis, but on Thursday a slew of soft data raised doubts about
the strength of the U.S. recovery.	
    A report by private payrolls processor ADP showed private
employers created 133,000 jobs in May, fewer than the expected
148,000, while new claims for unemployment benefits rose by
10,000 for the fourth straight weekly increase. The data comes
ahead of Friday's key payrolls report. 
    Adding to the negative tone, the Institute for Supply
Management-Chicago business barometer declined to 52.7 from 56.2
in April, its lowest level since September 2009 and below Wall
Street expectations. 	
    At 11:11 a.m. (1511 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 42.04 points, or 0.4
percent, at 11,391.18. The index has shed nearly 8 percent in
    Investor weariness with regards to Europe was evident on
Thursday as worries over Spain fueled demand for safe havens,
pushing Treasury debt yields to at least 60-year lows.
    Despite good second-quarter results from Canadian Imperial
Bank of Commerce and National Bank of Canada,
the Canadian financials index was flat. CIBC shares jumped 1.7
percent to C$71.56 after it reported a 6 percent increase in
quarterly income, topping estimates, on higher volumes at its
retail and business banking operations. 	
    National Bank shares rose 0.4 percent to C$73.40 after the
Montreal-based bank said its quarterly core profit rose a
stronger-than-expected 6 percent and raised its quarterly
    "Growth is getting slower, but that doesn't mean that
corporate profits are going to fall off the table," said
    There were some hopes that the European Central Bank may
step in to help ease the pressures in financial markets until EU
leaders can agree measures to tackle the structural problems at
the root of the current crisis. But ECB President Mario Draghi,
speaking to the European Parliament, has moved to rule this out.
    In addition, the latest Greek poll showed Greece's
conservative pro-bailout New Democracy party has a slim lead in
the run-up to the June 17 election that could decide whether the
country remains in the euro zone. 	
    In one of the few bright spots, Canada's information and
technology sector jumped 3.4 percent on news that CGI Group Inc
 agreed to buy Anglo-Dutch IT services firm Logica
 for $2.64 billion on Thursday. CGI's shares spiked
nearly 13 percent to C$23.71.