CANADA STOCKS-Weak data, debt fears drive TSX to month low

Fri Jul 29, 2011 11:33am EDT
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   * TSX falls 140.35 points, or 1.08 percent, to 12,907.43
* Energy, financial issues weigh most heavily
* Canadian and U.S. economic data weaker than expected
* Investors anxious over looming deadline on U.S. debt
* Moody's downgrade of Spain spurs euro zone debt fears
TORONTO, July 29 (Reuters) - Toronto's main stock index
plunged to a one-month low on Friday as weak U.S. and Canadian
economic data and worries over the U.S. debt impasse drove
equity investors to the exits.
 The index's energy sector weighed most heavily, down 1.13
percent, as the weak economic data dragged down oil prices.
Suncor Energy (SU.TO: Quote) fell 1.6 percent to C$36.49.
Economically sensitive financials also lagged, down 1.02
percent. Bank of Nova Scotia (BNS.TO: Quote) was the top heavyweight
decliner, down 1.5 percent at C$54.08, while Royal Bank of
Canada (RY.TO: Quote) fell 1.08 percent to C$51.49.
Canadian data on Friday showed the economy unexpectedly
shrank in May, with gross domestic product falling 0.3 percent
from a month earlier. It was the largest drop since a matching
decrease in May 2009. [N1E76S093]
U.S. figures showed the economy came perilously close to
shrinking in the first quarter and grew at a meager 1.3 percent
annual rate in the April-June period as consumer spending
barely rose. [ID:nCAT005481]
 "Overall the downgrading of economic growth is weighing on
the markets," said Kate Warne, Canadian market strategist at
Edward Jones in St. Louis. She said that slower economic growth
in recent months suggests the second half of the year may not
be as strong as expected.
 In the United States, U.S. Republican leaders scrambled to
rescue their budget deficit-cutting plan after conservatives
mounted a rebellion that heaped uncertainty on efforts to avert
a government debt default on Aug. 2 that was predicted to have
dire consequences. [MKTS/GLOB]
  "While earnings have come in pretty strong, nobody is
payinany attention," Warne said. "It's the economic news and
the political uncertainty in the U.S. that's really dominating,
and that's why we've got the TSX down so much."
  The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE was down 140.35 points, or 1.08 percent, at
12,907.43, the lowest level in a month. All 10 of the index's
main groups were lower.
 Adding to investor anxiety, rating agency Moody's placed
Spain's Aa2 credit rating on review for possible downgrade,
reviving fears of contagion in the euro zone debt crisis.
Helping to offset losses, Fairfax Financial (FFH.TO: Quote) rose
1.6 percent to C$376.01, after reporting stronger earnings for
the second quarter.
Some gold-mining shares rose, as gold prices jumped to a
record high. Centerra Gold (CG.TO: Quote) was up 1.4 percent at
C$18.89. Gold miners as a group, however, were down 1.3
 ($1=$0.95 Canadian)
 (Reporting by Trish Nixon; editing by Peter Galloway)