CANADA STOCKS-TSX drops on Fed worries, posts third straight weekly drop

Fri Aug 9, 2013 4:45pm EDT
 
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* TSX falls 10.79 points, or 0.09 percent, to 12,542.13
    * Five of 10 main sector indexes decline
    * Index slips 0.5 percent on week
    * BlackBerry shares soar on report that company may go
private

    By John Tilak
    TORONTO, Aug 9 (Reuters) - Canada's main stock index slipped
on Friday to record a third straight weekly decline as concerns
about potential monetary policy tightening by the U.S. Federal
Reserve overshadowed positive economic signals from China.
     Investors also tried to digest data showing unexpected
weakness in the Canadian labor market in July, hurt by job
losses in the public sector and scarce opportunities for young
people. 
    Separate data indicated Chinese factory output growth in
July was the strongest since the start of the year, a sign that
the world's second-largest economy may be stabilizing.
 
    Shares of BlackBerry Ltd jumped almost 6 percent
after several sources told Reuters that the smartphone maker is
looking at the possibility of going private. 
    But the market pendulum swung back once again to the Fed's
plans for its massive stimulus program.
    Investors have been anxious about when the U.S. central bank
might take its foot off the gas pedal, and recent signs have
been pointing to an imminent easing of bond buying.
    "The volatility that we're seeing in the North American
equity markets will likely be high over the next couple of
months," said Shailesh Kshatriya, associate director for client
investment strategies at Russell Investments Canada.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 10.79 points, or 0.09 percent, at
12,542.13. The index lost 0.5 percent for the week.
    Hit by volatile commodity prices, the resource-sensitive
Canadian market is barely positive for the year, offering a
strong contrast to record-setting gains in U.S. stocks.
    "We don't think sentiment is quite yet where we would like
to be in order to drive multiple expansion," Kshatriya said.
    He expects the Canadian index to end the year at 12,400 and
sees few near-term catalysts.
    Five of the 10 main sectors in the TSX were in the red on
Friday.
    Financials, the index's most heavily weighted sector, were
down 0.3 percent. 
    The stock of Royal Bank of Canada, the country's
biggest lender, dropped 0.6 percent to C$63.70. It had one of
the biggest negative influences on the TSX. Shares of Toronto
Dominion Bank slipped 0.5 percent to C$86.66.
    An index tracking the shares of energy producers declined
0.1 percent. Canadian Natural Resources Ltd slid 1.3
percent to C$31.40. Suncor Energy Inc dropped 0.3
percent to C$33.21.
    The industrials group was the biggest decliner among the
major sectors, falling almost 1 percent. Canadian National
Railway Co shed 1.1 percent to C$100.55.
    But BlackBerry's surge to C$10.05 helped push the
information technology sector index up 0.5 percent.