CANADA STOCKS-TSX nears three-week low on BMO, Fed fears

Tue Dec 3, 2013 11:09am EST
 
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* TSX falls 41.81 points, or 0.31 percent, to 13,377.76
    * Seven of 10 main index sectors decline
    * BMO slips 3.6 percent, weighs most on market
    * Potash up after announcing job cuts

    By John Tilak
    TORONTO, Dec 3 (Reuters) - Canada's main stock index fell on
Tuesday to its lowest in nearly three weeks as Bank of Montreal
 dropped after the company's results and concerns about
the U.S. Federal Reserve's bond buying program weighed on
overall sentiment.
    Shares of other major banks also fell as BMO, the country's
No. 4 bank, was the first of the big lenders to report earnings
this season.
    Recent positive economic data out of the United States,
including upbeat manufacturing numbers on Monday, revived fears
that the Fed might begin scaling back its monetary stimulus
program sooner than later.
    The Toronto stock market on Tuesday snapped a four-session
run of gains. In each of the past five months, the benchmark TSX
index has advanced.
    "The market might be taking a bit of a breather, working off
some of the overbought excesses over the last few weeks," said
Stan Wong, vice president and portfolio manager at Richardson
GMP Limited.
    "Going into the end of the year, (the TSX) might walk to the
finish rather than sprint into the finish despite the fact that
we are in the seasonally positive trend months."
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 41.81 points, or 0.31 percent, at 13,377.76,
after touching  13,331.10, its lowest level since Nov. 13.
    Seven of the 10 main sectors on the index were in the red. 
    The financial sector gave back more than 1 percent. Royal
Bank of Canada fell 0.9 percent to C$69.81, and Toronto
Dominion Bank was down 0.9 percent at C$96.02. 
    BMO, whose shares slipped 3.6 percent to C$70.87, said its
quarterly earnings rose 1 percent after stronger wealth
management results offset weaker income from the brokerage and
U.S. Harris Bank units. 
    "The important thing to look at is that BMO increased their
dividend and they're doing a share buyback," said Wong, whose
portfolio includes RBC and Bank of Nova Scotia.
    "I'm pretty constructive on the banks," added Wong. "The
banks can benefit from an improving economy and the fact that
investors are looking for visible yields that are also growing."
    Weighed by a weaker bullion price, gold-mining shares
slipped 1.2 percent. Goldcorp Inc lost 1.1 percent to
C$22.48, and Barrick Gold Corp declined 0.2 percent to
C$16.50.
    In other news, Potash Corp of Saskatchewan Inc said
it will cut its workforce by 18 percent as it struggles with
slumping demand and weak prices for the crop nutrient. The stock
advanced 0.2 percent to C$33.77.