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

Mon Jul 25, 2011 4:57pm EDT
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   * 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
 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.
 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.
 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)