CANADA STOCKS-TSX hits 1-week low on growth fears ahead of earnings

Tue Oct 9, 2012 1:18pm EDT
 
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* TSX down 111.22 points, or 0.9 pct, at 12,307.77
    * All 10 sectors lower in broad decline

    By Claire Sibonney
    TORONTO, Oct 9 (Reuters) - Canada's main stock index hit its
lowest level in over a week on Tuesday, tracking a fall in world
markets, on caution over the upcoming earnings season and
prospects for global growth.
    All 10 of the index's sectors fell on a wave of negative
signals, including a report from the International Monetary Fund
that said the global economic slowdown is worsening. The IMF cut
its growth forecasts for the second time since April.
 
    Commodity and financial shares were among the hardest hit.
Barrick Gold dropped 2.8 percent to C$39.96, Suncor
Energy was down 0.3 percent to C$32.91, and Royal Bank
of Canada lost 0.6 percent to C$57.10.
    "I think the IMF (report) is what people are paying
attention to. But it struck me as being a little bit late ...
current economic news coming out of the U.S. has been a little
bit better rather than worse," said Ian Nakamoto, director of
research at MacDougall, MacDougall & MacTier.
    Europe also kept investors on edge as uncertainty about when
Spain will apply for a bailout worried markets as did concerns
about Greece's debt load.  
    At 12:43 p.m. (1643 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 111.22 points, or 0.9
percent, at 12,307.77. Earlier, the TSX hit its lowest level
since Sept. 28.
    The U.S. quarterly earnings season will get under way later
in the day when Dow component Alcoa Inc reports after the
market close.
    Analysts forecast third-quarter earnings of S&P 500 
companies will drop 2.3 percent from the year-before quarter,
according to Thomson Reuters data, which would be the first drop
in U.S. quarterly earnings in three years.
    "I think it's well advertised that earnings are going to be
weak," added Nakamoto.
    "So even though earnings more than likely will be down, it's
a matter of how far down have investors brought share prices and
what sort of guidance are they looking for."