CANADA STOCKS-TSX stumbles on weaker commodities

Fri Oct 5, 2012 4:36pm EDT
 
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* TSX ends down 28.69 points, or 0.2 percent, at 12,418.99
    * TSX ends week 0.8 percent higher
    * Energy and materials fall; financials edge up

    By Claire Sibonney
    TORONTO, Oct 5 (Reuters) - Toronto's main stock index backed
away from its highest level in nearly three weeks on Friday as
concerns about weakness in the global economy hurt commodity
prices, countering unexpectedly strong North American jobs data.
    U.S. crude oil futures settled down nearly $2 a barrel as
signs this week of slowing in the manufacturing and services
sectors in Europe and China continued to weigh on investor
sentiment. 
    Energy stocks followed suit, falling 0.8 percent. The
biggest laggards included Suncor Energy, down 0.5
percent to C$33.00, Canadian Natural Resources, down
1.6 percent to C$30.22 and Encana Corp, off 2.6 percent
to C$21.27.
    "Concerns remain about the outlook for global growth,
particularly demand out of high-consumption emerging markets
like China, so we've gotten a little bit of weakness there,"
said Craig Fehr, Canadian market strategist at Edward Jones in
St. Louis.
    "Added to that is a strengthening U.S. dollar and all that's
coming together to push oil prices lower. Given the sensitivity
to resource prices in the TSX we're seeing a little bit of
weakness there," he added.
    Gold miners were also down sharply, off 1 percent, as
bullion retreated from an 11-month high. 
    Yamana Gold dropped 3.1 percent to C$18.60, Barrick
Gold fell 0.6 percent to C$41.13 and Kinross Gold
 lost 2.7 percent to C$10.59.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 28.69 points, or 0.23 percent, to
12,418.99. Six of the 10 sectors were negative. Financials edged
up 0.1 percent. Earlier, the index its strongest intraday level
since Sept. 17.
    The TSX ended the week 0.8 percent stronger, helped by
encouraging U.S. data and optimism that Spain will eventually
request a bailout, seen by some as the necessary next step to
alleviating the euro zone's debt crisis.
    The index's slant towards globally economic sensitive
commodity companies - which make up about half of the index -
has caused the TSX to dramatically lag Wall Street in 2012. The
TSX is up about 4 percent year to date, versus a 16 percent rise
for the S&P 500, near its best level in five years.
    Better-than-expected employment data from Canada and the
United States helped stem the losses on Friday.
    In Canada, the economy added 52,100 jobs in September, more
than five times the consensus figure analysts had expected, and
bolstering the Bank of Canada's case for an eventual interest
rate rise. 
    Meanwhile, the U.S. unemployment rate unexpectedly dropped
to 7.8 percent in September, reaching its lowest level since
President Barack Obama took office and providing a boost to his
re-election bid. 
    On Monday, Canadian markets will be closed for Thanksgiving,
while U.S. government offices and some financial markets will
close for the Columbus Day holiday, prompting some investors to
stay on the sidelines.
    "Quite often on the Friday before a long weekend there's
some selling coming into the market because people don't want to
carry positions for three days," said John Kinsey, portfolio
manager at Caldwell Securities.