CANADA STOCKS-TSX pulls back after Fed says unready to ease

Thu Jul 14, 2011 11:45am EDT
 
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 * TSX down 32.08 points, or 0.2 percent, at 13,292.86
 * Seven sectors down, materials the main drag
 (Adds details)
 TORONTO, July 14 (Reuters) - Toronto's main stock market
index was lower late on Thursday morning, erasing early gains,
after U.S. Federal Reserve Chairman Ben Bernanke said he was
not yet prepared to take new action to ease monetary policy.
 Early on Thursday the index extended gains from the day
before as Bernanke reiterated his Wednesday remarks that the
Fed could put more monetary stimulus into play if the economic
recovery stumbles.
 But his comments on not being ready to pull the trigger yet
pulled the market back as prices for key commodities such as
oil and copper reversed strong advances made on
better-than-expected U.S. retail sales data.
 At 11:40 a.m. (1540 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 32.08 points, or 0.2
percent, at 13,292.86.
 Seven of 10 main index sectors were lower, dragged down
mainly by the heavyweight materials group, which fell 0.6
percent.
 Gold prices were off the record high they hit earlier in
the session after an eight-day winning streak, and Toronto's
gold-mining issues turned lower.  [ID:nLDE76D01W] [GOL/]
[MKTS/GLOB]
 Barrick Gold ABX.TO fell 0.9 percent to C$46.19, while
diversified miner Teck Resources TCKb.TO lost 1 percent to
C$49.25.
 Some blue-chip resource issues managed to eke out gains
despite the soured sentiment. Potash Corp POT.TO rose 0.66
percent to C$56.19, while Suncor Energy SU.TO rose 0.45
percent to C$38.24.
 Investors were also on edge after Moody's put the United
States' Aaa credit rating under review late on Wednesday, while
monitoring developments in the impasse between the White House
and congressional Republicans over raising the statutory
borrowing limit.
 "We're still very worried about whether, politically, folks
will get their ducks in line or not," said Paul Taylor, chief
investment officer at BMO Harris Investment Management Inc.
"But we saw the S&P warning awhile back and so one more rating
agency piling on is not net new news."
 ($1=$0.96 Canadian)
 (Reporting by Ka Yan Ng; editing by Peter Galloway)