July 25, 2011 / 8:59 PM / 6 years ago

CANADA STOCKS-U.S. debt woes, RIM, Bombardier drag TSX lower

   * TSX down 58.68 points, or 0.43 percent, at 13,435.95
 * All 10 sectors weaker
 * Materials, financials weigh most heavily
 * RIM drops 4.84 percent after job cuts announced  (Updates to close. Adds analyst comment)
 By Trish Nixon
 TORONTO, July 25 (Reuters) - Toronto’s main stock index closed lower on Monday as bickering in Washington over raising the U.S. debt ceiling fueled worries of a default, while Research In Motion RIM.TO dropped on news of major job cuts.
 U.S. lawmakers were locked in a standoff over dueling debt plans that offered little prospect for compromise, increasing the threat of a downgrade and debt default that could sow chaos in global markets. [ID:nN1E76N0CA]
 “We’re still paying attention to all of the grief that goes on in the U.S. about the budget problems,” said Fred Ketchen, director of equity trading at ScotiaMcLeod. “That’s going to go on for a while.”
 The materials sector weighed most heavily on the Toronto exchange, falling 0.74 percent, as shares of gold miners dragged even as gold prices hit record highs in a broad flight to safety.
 Goldcorp (G.TO) was the most influential decliner on the index, falling 1.71 percent to C$50.59, while Barrick Gold (ABX.TO) was off 1.26 percent at C$47.02.
 Financial issues fell 0.47 percent, with Royal Bank of Canada (RY.TO) leading the decline, down 0.81 percent to C$52.82.
 Shares of Research in Motion dropped 4.84 percent to C$25.19 after the BlackBerry maker announced plans to cut about 11 percent of its workforce as it struggles compete against Apple (AAPL.O) and Google (GOOG.O). [ID:nL3E7IP251]
 “People are getting a little bit more concerned about how long they’re going to have to wait until this thing comes back to life again,” said Ketchen.
 Train and plane maker Bombardier (BBDb.TO) also dragged on the index, sinking 2.94 percent to C$5.94 after a deadly train crash in China over the weekend, which raised concerns about the safety of the country’s fast-growing rail network. [ID:nL3E7IP08Z].
 Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 58.68 points, or 0.43, percent, at 13,435.95. All of the 10 main sectors were weaker.
 Also weighing on investor sentiment was Moody’s decision to cut Greece’s credit rating further into junk territory. Moody’s said it was almost certain to slap a default tag on Greek debt as a result of a new EU rescue package. [ID:nL3E7IP0P2]
 Helping offset the decline were base-metal miners, up 0.32 percent as a group. Quadra FNX Mining QUX.TO helped lead the sector higher. It surged 5.5 percent to C$15.89 after the company reported second-quarter production jumped 20 percent. [ID:nL3E7IP25K]
 Canadian National Railway (CNR.TO) was another top gainer. Its shares were up 0.43 percent at C$75.24 ahead of the release of its second-quarter results after the market closed. It reported a 4 percent increase in quarterly earnings.
  ($1=$0.95 Canadian)  (Editing by Jeffrey Hodgson)                  

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