CANADA STOCKS-TSX 6-day rally ends as energy, Valeant fall

Wed Apr 6, 2011 5:05pm EDT
 
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   * TSX ends down 67.88 points, or 0.48 pct, at 14,202.65
 * Seven of 10 main sectors lower
 * Valeant shares fall as Cephalon rejects bid
 * Portugal debt woes weigh on investor sentiment
 (Adds comments from analyst and fund manager)
 By Jeffrey Hodgson
 TORONTO, April 6 (Reuters) - Toronto's main stock index
closed lower on Wednesday, ending six straight sessions of
gains, with energy and other resource issues leading the
decline even as commodity prices largely rose or held steady.
 Market watchers said signs of fresh sovereign debt problems
in Europe were among the factors weighing on sentiment.
Portugal's caretaker government said it had decided ask for
financing from the European Union, becoming the third euro zone
member to seek a financial rescue. [ID:nLDE7350HL]
 Suncor Energy SU.TO, down 1.93 percent at C$42.76, was
the most influential decliner, with peers Imperial Oil Ltd
IMO.TO and Canadian Natural Resources CNQ.TO also weighing
on the index.
 Brent crude oil prices rose to a 2-1/2-year high above $123
a barrel before erasing the majority of the gains in volatile
trade as market players fretted the recent oil rally was
overdone. [O/R]
 "Oil's been pushed to levels that people are starting to
worry about whether it could start impinging on the economic
recovery ... You've got Portugal back in the news, so we've got
the European debt situation starting to come up," said Rick
Hutcheon, president of RKH Investments.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed down 67.88 points, or 0.48 percent, at
14,202.65. Seven of the TSX's 10 main groups were lower, with
energy stocks dropping 1.21 percent.
 While oil was slightly stronger. U.S. natural gas futures
ended lower for a fourth straight day, with comfortable
supplies and moderate U.S. weather forecasts driving the
front-month contract below key chart support. [ID:nN06249394]
 Healthcare shares fell 1.9 percent, dragged lower by a 3.34
percent decline by Valeant Pharmaceuticals International
VRX.TO. The stock ended at C$50.35, following news that U.S.
drug maker Cephalon Inc CEPH.O had rejected its $5.7 billion
unsolicited takeover bid. [ID:nN05162826]
 Stock analysts said there was limited impact from news late
Tuesday that the Alberta government is mulling setting aside
close to 2 million hectares (7,700 square miles) of
conservation lands in the Canadian province's prolific oil
sands region.
 "The headline scare is a bit more than what the economic
reality might actually be," said Michael Sprung, president at
Sprung & Co Investment Counsel, who noted a number of
macroeconomic concerns were weighing on the broader market.
 "There still is some nervousness, particularly with respect
to fears of the oncoming tighter monetary policies, the
continuing problems in Europe. With Portugal, we've seen
(borrowing) rates going up fairly markedly," he said.
 Still, several investors said they thought Canadian markets
were more likely to climb than retreat in coming sessions,
lifted by corporate earnings growth, record commodity prices,
and a pickup in mergers and acquisitions activity.
 "The market and the economy will continue to saw-tooth
their way up. We've just got to be mindful of the saw teeth on
the way down," said Irwin Michael, portfolio manager at ABC
Funds.
 "There's still a lot of cash out there. Everyone's been
waiting for the market to come off and it really hasn't."
  ($1=$0.96 Canadian)
 (With additional reporting by Solarina Ho; editing by Peter
Galloway)