Toronto stocks weaken amid U.S. economic worries
TORONTO (Reuters) - Toronto stocks remained weak on Tuesday on falling financial shares, as persisting worries over the U.S. credit crunch and a bleak outlook from the Bank of Canada hammered the country's biggest banks.
The Bank of Canada cut its overnight interest rate by a quarter percentage point to 4.25 percent, saying it expected global financial market difficulties linked to the U.S. subprime crisis to persist longer than anticipated.
"Our market is weaker simply because we've got a Bank of Canada view that the U.S. economy is going to suppress demand for our exports and the problems in the subprime are not going to go away quickly," said Fred Ketchen, director of equity trading at ScotiaMcLeod.
Compounding problems earlier in the day were comments from a U.S. Treasury official in charge of debt management who said it would be a "long and slow" process to build confidence in financial markets.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 27.08 points, or 0.2 percent, at 13,630.09.
All of the country's biggest banks fell. Canadian Imperial Bank of Commerce (CM.TO: Quote) dipped C$1.82 to C$85.89 and Royal Bank of Canada (RY.TO: Quote), the country's biggest bank, was off 80 Canadian cents at C$52.69.
Interest rate-sensitive utilities fell, including TransAlta (TA.TO: Quote), which was off 53 Canadian cents at C$31.30 and Canadian Utilities CU.TO, down 32 Canadian cents at C$50.86.
Overall, five of the TSX index's 10 main groups retreated, with the financial group off 1.1 percent and utilities down 0.9 percent.
But gains among the healthcare sector, which was up 0.4 percent, and the resource-heavy materials group, which rose 0.4 percent, cushioned some of the blow. Continued...