CANADA STOCKS-TSX drops as US worries undermine strong China data
* TSX down 34.91 points, or 0.29 percent, at 12,204.72 * Concern over U.S. fiscal talks overshadows China data * Dairy company Saputo jumps on move to buy U.S. rival TORONTO, Dec 3 (Reuters) - Canadian stocks slipped on Monday as a contraction in U.S. manufacturing in November and worries about lack of progress in U.S. fiscal-crisis talks spurred investors to bank some recent gains despite strong manufacturing data from China. The financial sector weighed most heavily on the Toronto index, while some major gold miners also helped pull it lower. The small consumer staples sector led gains as dairy products maker Saputo Inc jumped after saying it will buy a U.S. competitor. By 10:37 a.m. (1518 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 34.91 points, or 0.29 percent, at 12,204.72. It has gained more than 3 percent since hitting a trough in mid-November. "We've had a pretty good rally. The concerns are that the U.S. is going to have trouble with the fiscal cliff," said Rick Hutcheon, chief operating officer at RKH Investments. Markets have focused for weeks on negotiations in Washington over some $600 billion in spending cuts and tax hikes scheduled to kick in next year that could tip the U.S. economy back into recession. Adding to the pessimistic tone to start the week, data on Monday showed U.S. manufacturing unexpectedly contracted in November for its worst performance in three years. U.S. Treasury Secretary Timothy Geithner pushed Republicans on Sunday to offer specific ideas to cut the U.S. budget deficit and predicted they would agree to raise tax rates on the rich to obtain a year-end deal to avoid the so-called fiscal cliff. Lingering worries about the issue eclipsed data from Chinese factories over the weekend that pointed to the giant Asian economy regaining its vigor after seven straight quarters of slowing growth. "It looks like things are starting to tick up a little bit. Any time you get positive data out of China, it's a good sign because that's one of the driving forces for the global economy," Hutcheon said. Cenovus Energy Inc had the biggest positive effect on the index, up 1 percent to C$33.69, and diversified miner Teck Resources Ltd added 1 percent to C$33.97. Saputo gained 2.9 percent to C$47.37 after agreeing to buy the Morningstar dairy division of Dean Foods Co for $1.45 billion.
© Thomson Reuters 2017 All rights reserved.