CANADA STOCKS-TSX slips from near 3-year high but golds shine

Tue Mar 1, 2011 5:26pm EST
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   * TSX closes down 13.65 points to 14,122.85
 * Eight of 10 sectors lower
 (Adds quotes, near-term outlook)
 By Claire Sibonney
 TORONTO, March 1 (Reuters) - Toronto's main stock index
retreated from its highest level in almost three years on
Tuesday, pulled lower by economic worries sparked by surging
oil prices, even as gold hit a record peak.
 U.S. Federal Reserve Chairman Ben Bernanke said the run-up
in crude prices was unlikely to derail the U.S. economy, but
his comments did little to reassure investors worried that
turmoil in the Middle East could affect Saudi Arabia, the
world's largest oil exporter. [ID:nN01145792]
 Economically sensitive financials were down 0.7 percent
despite solid results from Bank of Montreal (BMO.TO: Quote) and the
Bank of Canada keeping interest rates on hold, as expected.
[ID:nN01101155] [ID:nN01279267]
 BMO ended 0.3 percent lower at C$61.77 while
Toronto-Dominion Bank (TD.TO: Quote) dropped 1.7 percent to C$79.93.
 "It's more a question of the leverage that Canadian
financial institutions have to the broader economy, and any
hint of weakness would translate into profit-taking in that
group," said Elvis Picardo, an analyst and strategist at Global
Securities in Vancouver.
 The fact that U.S. markets were down sharply also helped to
take the steam out of the TSX's stronger start, said Picardo.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed down 13.65 points, or 0.1 percent, at
14,122.85. Eight of its 10 main groups were lower. Earlier in
the day, the TSX rose as high as 14,213.21, its best showing
since July 2008.
 The energy group drifted 0.2 percent lower, swayed by
worries over global growth, despite U.S. crude futures ending
above $99 a barrel. [O/R]
 Suncor Energy (SU.TO: Quote) however still closed up 0.2 percent
at C$45.76.
 "There are different variables in terms of pricing out an
oil stock. It's going to move in conjunction with the market as
well as the oil price," said John Kurgan, senior market
strategist at commodity futures brokerage Lind-Waldock Canada.
 He added that profit-taking was a factor in the energy
sector's slide.
 Offsetting the broader decline, gold miners climbed 2.1
percent as bullion prices rose above $1,432 an ounce on
safe-haven buying, spurred by the unrest in North Africa and
the Middle East.
 Goldcorp (G.TO: Quote) bounced up 3.6 percent to C$48.07, while
Barrick Gold (ABX.TO: Quote) gained 2.2 percent to C$52.41. The
broader materials group, home to gold miners, rallied 1.2
percent. [GOL/]
 "One of the few pockets of strength we're seeing today is
in the gold group ... that's more on account of overseas events
than anything out here in Canada," added Picardo.
 "Specifically, I think investors continue to be spooked by
what's happening in the Middle East and this time around $100
oil is not necessarily seen as a good thing."
 Base-metal miners, another materials component, fell 1
percent as the price of copper snapped a three-day advance.
 Market watchers questioned how much higher the TSX could go
given its current lofty levels.
 Picardo said it's going to become more difficult to build
on the gains of the last six months, given the remarkable run
until now.
 Kurgan added that direction will be largely driven by
markets south of the border.
 "It depends if the U.S. is undergoing a significant
correction here or not," he said, noting the S&P 500 index fell
1.6 percent on the day to 1,306.33.
 "The S&P has found support before in the 1,300 area. If it
continues to find support there then I think the Canadian
market will probably finish the week higher than it's been in
  ($1=$0.97 Canadian)
 (Reporting by Claire Sibonney; editing by Rob Wilson)