CANADA STOCKS-TSX weakens, but Fed move pulls it off day's low

Wed Nov 3, 2010 5:12pm EDT
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   * TSX down 10.30 points, or 0.08 percent, at 12,671.12
 * Fed to buy $600 bln of bonds by end of Q2 2011
 * Focus on Potash Corp, Ottawa's decision
 (Adds details, company news)
 By Jennifer Kwan
 TORONTO, Nov 3 (Reuters) - Toronto's main stock index
closed lower on Wednesday, but well off its session lows, after
the U.S. Federal Reserve committed to buy $600 billion more in
government bonds to revive the U.S. economy.
 The U.S. central bank launched its controversial new policy
on Wednesday, committing to buy about $75 billion in
longer-term Treasury bonds per month. [ID:nN03287174]
 The decision is aimed at further lowering borrowing costs
for consumers and businesses still suffering in the aftermath
of the worst recession since the Great Depression.
 Right after the decision was released, the Toronto Stock
Exchange's S&P/TSX composite index .GSPTSE see-sawed,
rallying, selling off and firming again.
 It ended down 10.30 points, or 0.08 percent, at 12,671.12,
but more than 100 points above its low for the day at
 The blue chip S&P/TSX 60 index .TSE60 closed 1.37 points
lower, or 0.19 percent, at 726.09.
 "The mystery was actually the early selloff, which I think
was some profit-taking and taking some risk off the table ahead
of the announcement," said Francis Campeau, a broker at MF
Global Canada, referring to the market's retreat before the Fed
 "Now that the Street is satisfied with what the Fed said,
they're simply coming back into the market," he said of the
subsequent rebound.
 Elvis Picardo, an analyst and strategist at Global
Securities in Vancouver, said "the knee-jerk reaction was that
the Fed move would be positive for the markets," but at the
same time markets had already priced in the news, and that is
why trade may have been choppy.
 Markets were generally priced for the Fed to initially
commit to buying at least $500 billion in Treasuries over
several months. [FRX/]
 The materials sector, down 0.5 percent, was a key source of
weakness on the TSX as the price of gold dropped. [GOL/]
 Barrick Gold ABX.TO was off 1 percent at C$48.68, while
Goldcorp G.TO sank 1.1 percent to C$44.89.
 Fertilizer companies remained in the spotlight with a
crucial ruling from the Canadian government scheduled for after
the market close  on whether to allow BHP Billiton's $39
billion takeover bid for Potash Corp POT.TO to go ahead.
Potash shares were largely flat, ending down 0.04 percent at
 Agrium AGU.TO skidded 2.7 percent to C$85.59 after the
farm products retailer reported quarterly results that missed
market expectations. [ID:nN02163884]
 Elsewhere, WestJet Airlines Ltd WJA.TO finished up 4.5
percent at C$13.37 after it unveiled the first dividend in its
14-year history on Wednesday. [ID:nSGE6A20J0]
 Enbridge Inc ENB.TO, whose pipeline woes this summer
disrupted North American oil markets, said its third-quarter
profit almost halved, hurt by ruptures on two of its key
pipelines. Enbridge shares were up 0.2 percent at C$56.15.
 ($1=$1.01 Canadian)
 (Reporting by Jennifer Kwan; editing by Rob Wilson)