CANADA STOCKS-TSX skids nearly 2 pct as resources tumble

Tue May 3, 2011 4:24pm EDT
 
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 * TSX down 242.14 points, or 1.74 percent, at 13,692.37
 * All 10 sectors fall
 * Analysts say Conservative election win offers stability
 (Updates to market close with details, comments)
 By Solarina Ho
 TORONTO, May 3 (Reuters) - Toronto's main stock index
plunged to a two-week low on Tuesday as falling commodity
prices drove resource shares deep into negative territory.
 The drop in the index mirrored a slide on stock markets
worldwide .MIWD00000PUS and these global factors largely
overshadowed the solid victory of the business-friendly
Conservatives in Monday's Canadian election.
 "Let's face it, our equity markets, for the most part ...
it all comes down to what these commodity prices are doing.
Today, I think that's taken over as the story," said Gareth
Watson, vice president, investment management and research, at
Richardson GMP.
 The energy and materials groups -- which combined make up
about 50 percent of the index -- fell more than 2.7 percent
each, as a strengthening U.S. dollar sapped investor appetite
for commodities. Most commodities are priced in U.S. dollars.
[GOL/][IO/R]
 Suncor Energy SU.TO sank 5.59 percent to C$41.55, and was
the index's heaviest decliner even though the country's biggest
energy company reported a higher quarterly profit on Tuesday.
Its drag on the index was nearly three times more than the next
biggest decliner, Potash Corp POT.TO, which was off 3.11
percent at C$51.46.[ID:nL3E7G312N]
 Crude oil prices had their biggest single-day percentage
loss in three weeks on Tuesday as global demand worries and the
U.S. dollar's strength sparked a sell-off. [O/R]
 Goldcorp G.TO fell 2.85 percent to C$48.69, while Barrick
Gold ABX.TO lost 2.1 percent to C$46.25 as gold prices
dropped from record highs above $1,570 an ounce on waning
safe-haven buying. Silver prices also had their biggest two-day
loss since December 2008.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed 242.14 points, or 1.74 percent, lower at
13,692.37.  All of its 10 main index groups fell.
 In the afternoon, the benchmark dropped more than 2 percent
to as low as 13,618.76, its lowest point since April 18.
 Manulife Financial MFC.TO fell 4 percent to C$16.80 to
help push down the index's financial group 1.06 percent.
 Francis Campeau, broker at MF Global Canada in Montreal,
said the Conservative victory in Monday's election will offer
the market long-term stability.
 The business-friendly party, which has formed a minority
government since 2006, now has a clear majority mandate to
govern for four years.
 "By (the Conservatives) getting a clear majority in the
Parliament, markets are able to handicap investment
opportunities better," said Stephen Wood, chief investment
strategist for North America at Russell Investments in New
York.
($1=$0.95 Canadian)
 (Additional reporting by Ka Yan Ng; editing by Peter
Galloway)