CANADA STOCKS-TSX dips as Europe woes offset Rogers earnings

Tue Jul 24, 2012 5:00pm EDT
 
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* TSX ends down 78.59 pts, or 0.7 pct, at 11,466.95
    * Energy, financial shares lead losses
    * Spain, Greece worries rattle markets
    * Rogers Communications jumps nearly 5 pct

    By Jon Cook
    TORONTO, July 24 (Reuters) - Canadian stocks fell for the
third straight session on Tuesday, led by energy and financial
shares, as uncertainty about Greece and Spain heightened euro
zone debt worries, overshadowing solid earnings from telecoms
leader Rogers Communications Inc.
    Concerns about the euro zone focused on Spain's high
borrowing costs as the country paid the second-highest yield on
short-term debt since the 1999 launch of the euro. European
Union officials said Greece had little hope of meeting the terms
of its bailout. 
    Weak manufacturing data, the threat of a credit ratings
downgrade for Germany and disappointing second-quarter results
from Deutsche Bank AG added to the euro zone malaise.
   
    "It's Europe, Europe, Europe and it doesn't really matter
what the story is right now," said Paul Hand, managing director
at RBC Capital Markets.
    Nine of Canada's 10 main sectors finished lower. The
heavyweight energy complex led losses, falling 1.8 percent a day
after rising more than 2 percent in the wake of Nexen Inc's
 $15-billion takeover offer by China's state-owned oil
company CNOOC. 
    The Nexen deal - China's richest foreign takeover bid yet -
must still be approved by the Canadian government. On Tuesday,
Prime Minister Stephen Harper told reporters: "Nobody should
prejudge the government's position. This investment will be
thoroughly scrutinized before it is either accepted or
rejected." 
    The biggest energy decliners included Canadian Natural
Resources, down 3.9 percent to C$27.67, Suncor Energy
, which slid 1.8 percent to C$29.76, Cenovus Energy
, off 3.5 percent at C$32.10, and Encana Corp,
down 3.5 percent at C$20.77.
    "You had many of them up yesterday, probably unwarranted, in
the context of takeovers," said Hand. "There's probably more of
a corrective action in the oils."
    Canadian financials sank 0.8 percent on the euro zone worry.
Declines were led by Toronto-Dominion Bank, which slid
0.8 percent to C$78.43, Bank of Nova Scotia, down 0.5
percent at C$51.15, and Sun Life Financial, falling 2.7
percent to C$20.26.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 78.59 points, or 0.7 percent, at
11,466.95. The index retreated more than 100 points after
touching a session high at 11,577.63.
    Equities were also pressured by lowered 2012 U.S. profit
forecasts, including United Parcel Service, the world's
largest package delivery company. U.S. data also showed
manufacturing expanded at its slowest pace since late 2010.    
    "Right now there's overwhelming concern about a global
slowdown," said Michael Simpson, senior portfolio manager at
Sentry Select Capital Corp.
     
    TELECOMS GAINS
    The safe-haven telecommunications sub-index led gains,
rising 1.4 percent after earnings from Rogers Communications,
Canada's largest mobile phone company, beat expectations. 
    Rogers Communications shares jumped almost 5 percent to
C$39.01 after it reported higher adjusted earnings on Tuesday as
profit margins rose in its cellular phone business even as
competition picked up. 
    "Rogers shares were strong," said Simpson. "There's going to
be volatility in the market, so you look for companies that have
the ability to pay a dividend and those special breed that can
raise their dividend."
    Shares of telecom rival BCE Inc also rose, climbing
1.2 percent to C$41.79.
    In other positive news, Eldorado Gold Corp jumped 4
percent to C$10.36 after a Greek court revoked an order that
temporarily stopped work at the Canadian company's gold mining
project in the north of Greece, Eldorado said on Tuesday.