June 1, 2011 / 8:57 PM / 6 years ago

CANADA STOCKS-TSX tumbles nearly 2 pct; data feeds growth fears

3 Min Read

   * TSX down 275 points, or 1.99 pct, at 13,527.88
 * All 10 main groups close down
 * U.S. economic data weighs on sentiment
 By Julie Gordon
 TORONTO, June 1 (Reuters) - Toronto's main stock index tumbled nearly 2 percent on Wednesday, led by financial and energy shares, as disappointing U.S. data fueled fears that North American economic growth is stalling.
 Data that dampened investor sentiment included a report that the U.S. manufacturing sector fell more than expected in May to its lowest point since Sept. 2009. [ID:nOSL016366]
 Meanwhile, private-sector payrolls growth slowed sharply, falling to its lowest in eight months, prompting some economists to lower forecasts for Friday's U.S. government jobs report. [ID:nLDE7501Y8]
 "Those two economic data points were pretty disappointing to investors, and you've seen a fairly broad sell-off -- energy, financials, technology -- are all down," said Youssef Zohny, a portfolio manager with Van Arbor Asset Management.
 "Investors have quite a bit of uncertainty towards the direction of the economy."
 The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 275 points, or 1.99 percent, at 13,527.88. All of the 10 main groups were down.
 Financial stocks, which include banks, fell 2.48 percent and played the biggest role of any sector in leading the market lower.
 The Royal Bank of Canada (RY.TO) was the biggest drag on the the broader market, slipping 3.07 percent to C$54.88, followed by Toronto Dominion Bank (TD.TO), which was down 3.23 percent at C$80.81.
 The Canadian Imperial Bank of Commerce (CM.TO) closed down 3.45 percent at C$77.54, while the National Bank of Canada (NA.TO) fell 2.37 percent to C$79.03 after RBC Capital Markets downgraded both banks to "sector perform" from "outperform". [ID:nL3E7H11Y4]
 Another big weight on the market was BlackBerry maker Research In Motion RIM.TO, which closed down 5.13 percent at C$39.23.
 News that rival mobile phone maker Nokia slashed its outlook, and scrapped forecasts for 2011 due to tumbling prices and intense competition from Apple and Google, knocked RIM's already battered shares lower. [ID:nLDE74U1CO]
 "The Nokia thing has affected RIM more than some of the others. Nokia was the bright shining star. ... RIM had been that until Apple came with their new products. The industry is just so super competitive," said John Kinsey, a portfolio manager at Caldwell Securities Ltd.
 The energy sector also dragged, falling 2.88 percent, led lower by Canadian Natural Resources (CNQ.TO) and Suncor Energy (SU.TO).
 ($1=$0.98 Canadian)  (With additional reporting by Solarina Ho; Editing by Jeffrey Hodgson)                                        

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