CANADA STOCKS-TSX plunges to July low on U.S. debt deadlock

Wed Jul 27, 2011 5:44pm EDT
 
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 * TSX down 267.89 points, or 2.01 percent, at 13,032.67
 * All 10 sectors weaker, led by materials, energy
 * RIM slides 5.7 pct after UBS share-price target cut
 (Adds details)
 By Trish Nixon
 TORONTO, July 27 (Reuters) - Toronto's main stock index
plunged more than 2 percent on Wednesday to its lowest point
this month as weak U.S. data and a looming deadline for raising
the U.S. debt ceiling sent investors searching for safety.
 Republicans and Democrats rushed to rework rival plans for
deficit reduction, but with the fate of both proposals heavily
in doubt, top lawmakers pursued a behind-the-scenes compromise
to avert a crippling U.S. debt default.  [ID:nN1E76P2HJ]
 A late statement from White House that the government would
be "running on fumes" if the debt ceiling isn't increased by
the deadline added to selling. [ID:nN1E76P2HJ]
 Further undermining investor confidence, U.S. data showed
new orders for long-lasting U.S. manufactured goods fell
unexpectedly in June, and a gauge of U.S. business spending
plans slipped. [ID:nN1E76Q0BV]
 "The macro issues are the major driver," said Fergal Smith,
managing market strategist at Action Economics.
 "The market is keying off the U.S. budget gridlock, but
also the weak U.S. data."
 The materials and energy sectors weighed most heavily on
the index, down 2.77 percent and 2.21 percent respectively, as
global commodity prices fell.  [O/R] [MET/L]
 Suncor Energy (SU.TO: Quote) was the biggest weight on the index,
falling 2.7 percent to C$38.14, while Toronto-Dominion Bank
(TD.TO: Quote) followed, down 2.1 percent at C$77.
 Research In Motion RIM.TO also dragged the index lower.
Its shares fell 5.7 percent to C$24.37 after UBS cut its price
target, saying the BlackBerry maker is still in the early
stages of a software transition and is facing daunting
competition. [nN1E76Q08E]
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended the day down 267.89 points, or 2.01 percent, at
13,032.67. All of its 10 main groups were weaker.
 "The loss has been very broad based," Smith said.
"Investors are trying to manage the risk profile against the
current backdrop."
 Helping to offset losses, shares of Sino-Forest TRE.TO
jumped 8 percent to C$7.69 after a large Singapore-based fund
increased its stake in the embattled Chinese forestry company
to nearly 15 percent. [ID:nN1E76Q0DC]
 The stock was the most influential gainer on the index and
the most heavily traded, with more than 12 million shares
trading hands.
 Also helping support the market was Valeant Pharmaceuticals
International (VRX.TO: Quote). It's stock rose 0.5 percent percent to
C$52.75 after reports that the Canadian company had made a
takeover offer for Swedish drugmaker Meda AB MEDAa.ST
 [ID:nL3E7IR1BE]
 Husky Energy Inc (HSE.TO: Quote) reported higher-than-expected
second quarter profit, and said it expects to recoup its
investment in a $6.5 billion Asian offshore gas project in four
to five years. [ID:nL3E7IR3D2]
 Shares of Canada's No. 3 oil producer and refiner fell 0.6
percent to C$26.52, a marginal loss when compared to the
overall decline in the energy sector.
 Canadian Pacific Railway (CP.TO: Quote) reported a rise in
quarterly revenues, though its profit fell 23 percent due to
weather-related problems. Its shares ended the session down
0.63 percent at C$58. [ID:nL3E7IR2Y6]
 ($1=$0.94 Canadian)
 (Editing by Jeffrey Hodgson)