CANADA STOCKS-TSX slips as Fed comments weigh on gold

Thu Jun 7, 2012 4:36pm EDT
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* TSX ends down 41.28 points at 11,592.12
    * Earlier hit highest level in nearly 4 weeks
    * China rate cut boosts global markets
    * Sliding gold stocks keep TSX under pressure
    * Barrick Gold key drag on index

    By Jennifer Kwan	
    TORONTO, June 7 (Reuters) - Canadian stocks stumbled on
Thursday as gold prices skidded after U.S. Federal Reserve
Chairman Ben Bernanke offered no hints further stimulus was
imminent, halting a rally fueled by a surprise interest rate cut
in China.	
    Gold tumbled as the comments by Bernanke prompted investors
to unwind bullish bets on expected easing after last week's
dismal U.S. jobs report. 	
    "Bernanke didn't give the green light towards quantitative
easing, a factor that would've supported gold," said Fergal
Smith, managing market strategist at Action Economics.   
"That's been a disappointment for folks who are long gold."	
    Bullion was hit especially hard as it has been heavily used
by institutional investors to hedge against the economic
uncertainties brought by monetary easing.	
    The Toronto Stock Exchange's S&P/TSX composite index
 ended the day down 41.28 points, or 0.35 percent, at
11,592.12, but most of its key subsectors were higher.	
    Plunging gold stocks mainly kept the broader index under
pressure and from keeping pace with gains in overseas
    Barrick's shed 4.2 percent at C$39.79 after the
surprising ouster of Chief Executive Aaron Regent on Wednesday
raised more questions than it answered for anxious investors.
    Goldcorp sank 2.9 percent to C$40.12, and Yamana Gold
 was down 2.5 percent at C$16.12.	
    Earlier, the main stock index had risen as high as
11,727.58, its strongest level since May 11, as China delivered
twin surprises on interest rates, cutting borrowing costs to
combat faltering growth while giving banks additional
flexibility to set competitive lending and deposit rates.
    Given weak U.S. data and troubles in Europe, there has been
rising speculation of more stimulus measures from global central
    "It shows the Chinese authorities recognize that the
slowdown in China has gone far enough," said Gavin Graham,
president at Graham Investment Strategy.	
    "That means there's likely to be an increase in demand for
commodities and an increase in demand for the Chinese domestic
economy, which will help world trade and therefore
commodity-based, resource-based markets like Canada." 	
    Diversified miner Teck Resources was up 0.7
percent at C$32.55 and Cenovus climbed 1.5 percent to
C$32.97. First Quantum was higher by 1.5 percent at
    Yogawear retailer Lululemon Athletica Inc plummeted
8.8 percent at C$65.75 after its said that inventories rose and
sales growth in established stores would slow.