CANADA STOCKS-Financials drag TSX to slightly lower close

Fri Oct 1, 2010 5:20pm EDT
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 *TSX closes down 5.57 points at 12,363.08
 *Six of index's 10 main sectors weaker
 *Resource shares rally after Chinese data
 (Updates to close)
 By Claire Sibonney
 TORONTO, Oct 1 (Reuters) - Weak U.S. manufacturing data and
cautious remarks from the U.S. Federal Reserve pressured
heavyweight financial shares and tugged Toronto's main stock
index slightly lower on Friday.
 The financials declined 0.7 percent, with insurers feeling
the brunt of the drop. Sun Life Financial (SLF.TO: Quote) fell 1.9
percent to C$26.40, and Manulife Financial (MFC.TO: Quote) dropped 1.7
percent to C$12.76.
 Hurting the insurers were comments from William Dudley,
president of the New York Fed, who said U.S. growth has been
generally disappointing, which boosted the case for continued
low U.S. interest rates and other Fed actions to drive down
borrowing costs. [ID:nNLL1LE6II]
 Continued low interest rates hurt the returns insurers get
on their large investments in fixed-return securities.
 Also pulling down the Toronto index was U.S. data that
showed factory activity slipped and inflation remained subdued
in August. [ID:nN01186494]
 Supporting the index was stronger-than-expected Chinese
manufacturing data, which lit a fire under commodity prices and
lifted the demand outlook for Canada's key exports. [O/R]
 The index's energy group, up 1.1 percent, and its
base-metals subsector, up 1.5 percent, led the gainers as oil
rose closer to $82 a barrel and copper rallied to its firmest
level in more than two years.
 Oil company Canadian Natural Resources (CNQ.TO: Quote) jumped 3.3
percent to C$36.77 and base-metals miner Teck Resources
TCKb.TO advanced 2.4 percent to C$43.35.
 Gold miner Barrick Gold (ABX.TO: Quote) added 0.8 percent to
C$47.94, as gold extended its record-breaking rally after the
Fed comments brightened the outlook for the safe-haven metal as
an alternative investment to the U.S. dollar. [GOL/]
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed down 5.57 points at 12,363.08. Six of the
index's 10 main groups were lower. It ended the week 1.3
percent stronger.
 Early in the day the index rose to its highest level since
September 2008, but the market then took a breather after
notching big gains in September and in the third quarter.
 "There's a lot to be positive about but there's a lot to be
cautious about because the market is up a lot," said Ian
Nakamoto, director of research at MacDougall, MacDougall &
 He noted that "October seems to be a spooky month," during
which the biggest stock market crashes in history have
 Research In Motion RIM.TO, up 2.2 percent at C$51.20, was
in the spotlight as the Indian government said it has manual
access to chat communication on BlackBerry messenger services
and expects to get automated access from Jan. 1
 Alimentation Couche-Tard (ATDb.TO: Quote) was down 2.4 percent at
C$22.47. It abandoned its $2 billion hostile takeover bid for
Casey's General Stores (CASY.O: Quote) on Thursday, nearly half a year
after it made its initial offer for the U.S. convenience store
chain. [ID:nN30225942]
 ($1=$1.02 Canadian)
 (Editing by Peter Galloway)