CANADA STOCKS-TSX retreats from 3-week high to end lower

Mon May 2, 2011 5:42pm EDT
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   * TSX down 10.28 points, or 0.07 percent, at 13,934.51
 * Eight of 10 sectors rise, led by financials
 * Gold prices fall from record high after bin Laden death
 * Canadian election day overshadowed by bin Laden news
 (Adds analyst comments)
 By Solarina Ho
 TORONTO, May 2 (Reuters) - Toronto's main stock index
closed lower on Monday, after hitting a three-week high earlier
in the day, as oil and gas issues erased gains and the death of
Osama bin Laden cut some of gold's safe-haven premium.
 The overall materials group, home to gold miners, was down
2.05 percent while the gold sub-index was off 2.69 percent.
 Gold miners were hit hard as bullion prices fell from
record highs as bin Laden's death eroded their safe-haven
appeal. Goldcorp (G.TO: Quote) was the biggest heavyweight decliner,
down 5.24 percent at C$50.12, followed by Barrick Gold
(ABX.TO: Quote), which fell 2.24 percent to C$47.24. Agnico Eagle
(AEM.TO: Quote) gave back 3.84 percent to finish at C$63.39.
 Energy stocks ended the day off 0.01 percent. They shadowed
movements in oil prices, which seesawed through the session as
investors weighed the impact of bin Laden's death on crude
futures. [O/R] One of the biggest movers, Imperial Oil
(IMO.TO: Quote), was down 1.14 percent at C$49.43.
 "It looks like the market's not quite sure how to take the
death of bin Laden," said Laura Lau, senior portfolio manager
at Sentry Select Capital Corp.
 "Right off the bat oil was down, then it went up, and then
it went down again, so they're not quite sure if it's good or
bad. What we would expect is there probably will be some
retaliation from terrorists for the deaths. Because of that, we
can certainly expect added political risk," she said.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE finished the day down 10.28 points, or 0.07 percent
at 13,934.51 after rising more than 1 percent to as high as
14,089.10, its strongest level since April 11. Eight of the
index's 10 sectors finished higher.
 "There's been some minor initial effects on markets ... but
from there, it's more back to business, which is a heavy
economic calendar this week. The markets are going to trade on
that," said Paul Taylor, chief investment officer at BMO Harris
Private Banking, noting that the geopolitical influences on oil
prices is unlikely to last.
 "I think calmer heads will prevail and presumably the spec
premium we're seeing in the price of oil will dissipate as we
go forward."
 Financial stocks, which make up roughly a third of the
index's weight, were up 0.81 percent.
 The rise was led by Manulife Financial (MFC.TO: Quote), which
advanced 3 percent to C$17.50. Bank of Nova Scotia (BNS.TO: Quote),
was up 1.23 percent at C$58.40.
 Monday was election day in Canada but voting was
overshadowed by the bin Laden news. Toronto stocks had traded
cautiously in the final week leading up to the vote, with
analysts attributing some of the retreat to wariness inspired
by the surge of the left-leaning New Democratic Party in public
opinion polls. [ID:nN29174448]
 The right-of-center Conservatives, who have governed since
early 2006, started the campaign with a healthy lead in the
polls, but that dwindled as the NDP pushed past the Liberals to
take a strong second place. [ID:nN02201446] [ID:nN29210714]
 "It's certainly most worrisome if the NDP were to become
official opposition. We would certainly be concerned about
increased spending and increased taxation," said Lau, adding
that energy stocks could be in focus because of the possibility
of added environmental costs.
 Any election-related movement is likely to be short-lived
however, with analysts citing broader issues still driving the
 "The Canadian market is going to trade on the strength of
the U.S. economy and the strength of the conditions in the Far
East and its impact on commodity prices -- none of which will
be impacted by the Canadian election tonight," said Taylor.
 ($1=$0.95 Canadian)
 (Editing by Peter Galloway and Rob Wilson)