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

Wed Jun 1, 2011 5:15pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

   * TSX down 275 points, or 1.99 pct, at 13,527.88
 * Biggest one-day fall since August 11
 * 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 pace of growth in the U.S. manufacturing sector
tumbled in May, slackening more than expected to its slowest
since September 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," 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. It was the biggest one-day drop for the index since
August 11.
 All of its 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: Quote) was the biggest drag on
the the broader market, slipping 3.07 percent to C$54.88,
followed by Toronto Dominion Bank (TD.TO: Quote), which was down 3.23
percent at C$80.81.
 The Canadian Imperial Bank of Commerce (CM.TO: Quote) closed down
3.45 percent at C$77.54, while National Bank of Canada (NA.TO: Quote)
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: Quote) and Suncor Energy
(SU.TO: Quote).
 Zohny said the market would likely continue to pull back
from its brief rally over the last two weeks, as the sovereign
debt crisis in Europe and the negative economic data from the
U.S. continue to weigh on investor sentiment.
 "The markets are going to digest this economic data and
look towards Friday's payroll numbers to get a better feel for
the direction of the economy," he said.
 The heavyweight materials sector, which includes mining
companies, slipped 1.44 percent even as the price of gold
rebounded on safe-haven buying after the disappointing U.S.
economic data. [GOL/]
 Fertilizer producer Potash Corp (POT.TO: Quote) fell 2.2 percent
to C$53.41 after U.S. wheat futures tumbled on Russia's
aggressive return to world export markets after a year's
absence. [ID:nLDE750175]
 ($1=$0.98 Canadian)
 (With additional reporting by Solarina Ho; Editing by Jeffrey
Hodgson)