CANADA STOCKS-TSX slips on US fiscal crisis, Canadian Natural plans

Tue Dec 4, 2012 3:03pm EST
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* TSX falls 34.36 points, or 0.28 percent, at 12,134.48
    * Canadian Natural off 2 pct after outlook fails to impress
    * Eight of 10 main sectors decline

    By John Tilak
    TORONTO, Dec 4 (Reuters) - Canada's main stock index fell on
Tuesday, led by a drop in Canadian Natural Resources Ltd
 on concerns about its 2013 outlook, while the overall
market continued to fret about whether U.S. politicians would be
able to resolve the country's looming fiscal crisis.
    Shares of Canadian Natural fell 2 percent to C$27.60 despite
a bullish price forecast for the company's oil-sands crude, as
investors had expected more substantial production growth,
analysts said. 
    "Evidently the market felt that was a little disappointing,"
said Gavin Graham, president of Graham Investment Strategy. 
    The energy sector, which played the single biggest role in
leading the index lower, was down 1 percent, tracking lower oil
    Other oil and gas producers declined in sympathy with
Canadian Natural, with Encana Corp down 2 percent at
C$21.19 and Nexen Inc falling 1.8 percent to C$24.22.
    "You're seeing a combination of micro, company-specific
issues and macroeconomic issues putting pressure on the energy
sector," said Craig Fehr, Canadian market strategist at Edward
Jones in Missouri.
    "Investors are looking at the global growth story, realizing
that it's continuing to weigh on external demand, particularly
for resource exports that will come out of Canada," he said.
    But the broader concern for investors was the risk that U.S.
politicians would fail to reach a deal to prevent the trigger of
automatic government spending cuts and tax increases in early
2013 from tipping the economy back into recession.
    President Barack Obama said on Tuesday there is not enough
time this year to come up with an overhaul of the U.S. tax
system and entitlement programs that Republicans want as a
condition for an agreement to avoid the so-called "fiscal
    "It's as bad as the NHL hockey discussions. Both sides have
hardened their positions when there were expectations of hope,"
said John Ing, president of Maison Placements Canada.
    "They're running out of time. There is maybe a week left
before something meaningful can be done. It is a worry," he
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 34.36 points, or 0.28 percent, at 12,134.48
by mid-afternoon. Eight of the 10 main sectors on the index
    ShawCor Ltd was the fourth biggest drag. The
energy services company shed 15.3 percent to C$38.91 after it
said it was unlikely to sell itself following a review of
strategic alternatives that it had undertaken. 
    Bank of Montreal gained 0.6 percent to C$59.66
after Canada's fourth-largest lender reported a 41 percent rise
in quarterly profit, topping estimates, as wholesale banking
income doubled and loan-loss provisions plunged. 
    Goldcorp Inc was up 1.8 percent at C$37.95, and
Barrick Gold Corp rose 0.7 percent to C$33.83, helping
the materials sector, which includes mining companies, to
advance 0.2 percent.