REFILE-CANADA STOCKS-Economic doubt spurs profit-taking on TSX

Tue Aug 11, 2009 5:00pm EDT
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 (Refiles to correct day in sixth paragraph to Tuesday from
 * TSX drops 164.20 points, or 1.52 percent, to 10,629.47
 * Financials biggest decliner, off 2.6 percent
 * Mixed data fuels market caution about economic recovery
 (Updates closing figures, adds details, quote)
 By Jennifer Kwan
 TORONTO, Aug 11 (Reuters) - Toronto's main stock index sank
on Tuesday as mixed economic data and a gloomy outlook for U.S.
banks painted by a prominent analyst spurred doubt about
recovery and led to profit-taking.
 Hardest hit were financial and oil companies, with the
index's financial group down 2.6 percent and the energy group
dropping 1.7 percent.
 Royal Bank of Canada (RY.TO: Quote) fell 2.4 percent to C$49.48,
while Bank of Nova Scotia (BNS.TO: Quote) was down 3.1 percent at
C$44.05. Insurer Manulife Financial (MFC.TO: Quote), down 1.6 percent,
and Sun Life Financial (SLF.TO: Quote), down 5.2 percent, also weighed
on the sector.
 The financial sector followed U.S. banks lower after
comments by veteran banking analyst Richard Bove recommended
taking short-term profits in U.S. bank stocks as he said he
expects a pullback in share prices. [ID:nBNG503348]
 The big energy sector was hit as the price of oil fell on
doubts over the pace of economic recovery, in part after
disappointing U.S. wholesale business inventories data.
[ID:nSP473359] Suncor Energy (SU.TO: Quote) dropped 3 percent to
C$34.91, while Canadian Natural Resources (CNQ.TO: Quote) was down 2.5
percent at C$62.22.
 Mixed economic data from China [ID:nLB659792] and the
United States on Tuesday [ID:nN11524774] dented expectations of
economic recovery, said Paul Taylor, chief investment officer
at BMO Harris Investment Management Inc.
 Adding to the cautious mood, Canadian housing starts fell
unexpectedly in July, dropping 4.1 percent from June and
breaking a two-month run of gains. [ID:nN11509601]
 "People are still questioning whether the markets may have
come too far too fast, and whether the pace of economic
recovery will be as strong as people expect in Q3 of 2009,"
Taylor said.
 The S&P/TSX composite index .GSPTSE closed 164.20 points,
or 1.52 percent, lower at 10,629.47, with eight of its 10 main
groups falling.
 ($1=$1.10 Canadian)
 (Reporting by Jennifer Kwan; editing by Peter Galloway)