3 Min Read
(Updates to mid-afternoon)
*TSX tumbles in broad retreat
*Coal companies stung by decline in coal price
*Pessimism over economic outlook weighs
TORONTO, July 2 (Reuters) - The Toronto Stock Exchange's main index retreated sharply on Wednesday as coal producers fell in tandem with the price of the commodity and weak U.S. economic data added to a darkening global outlook.
Swinging in a wide breadth after initially climbing 100 points at the open, the index was led lower by declines in resource companies. Fording Canadian Coal Trust FDG_u.TO was among the biggest losers as the price of U.S. benchmark coal slumped, echoing a European sell-off.
The heavyweight energy sector also sagged despite a gain for the price of oil, amid investor angst over the impact of high commodity prices on the economy and how long recent soaring levels can last.
"I think it's just the general economic outlook for the second half of the year that would say we're not out of our troubles, and it's going to take longer to sort itself out than anyone expected," said Brian Pow, vice-president, research and equity analyst at Acumen Capital Partners, in Calgary.
The S&P/TSX composite index .GSPTSE was down 249.63 points, or 1.7 percent, at 14,217.40 by mid-afternoon with all but two of its 10 main sectors looking down. Immediately after the open, the index climbed as high as 14,584.85 after being closed on Tuesday for the Canada Day holiday.
South of the border, a report on U.S. private sector employment was weaker than expected, as employers slashed 79,000 jobs in June. The report raised worries over the government's payrolls report, due on Thursday.
The materials sector gave up 4.5 percent, stung by its mining subindex which shed 7.2 percent. Fording skidded C$13.85, or 14.2 percent, to C$83.65, and Teck Cominco TCKb.TO slumped C$4.16, or 8.5 percent, to C$45.01.
The energy sector lost 1.2 percent, while oil rose following a government report that showed a sharp drop in U.S. crude supplies.
Suncor Energy (SU.TO) fell C$1.94, or 3.3 percent, to C$57.26, and Canadian Oil Sands Trust COS_u.TO was down C$1.01, or 1.8 percent, at C$53.99.
The financial sector reversed from earlier gains, falling 0.9 percent, as banks were plagued by worries of more fallout from the credit crunch. Bank of Montreal (BMO.TO) was off 92 Canadian cents, or 2.2 percent, at C$41.58, and Toronto-Dominion Bank (TD.TO) eased 48 Canadian cents, or 0.8 percent, to C$63.77. ($1=$1.01 Canadian) (Reporting by Leah Schnurr; Editing by Scott Anderson)