CANADA STOCKS-TSX falls with U.S. stocks; golds cushion drop

Thu Aug 25, 2011 11:24am EDT
 
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 *TSX down 89.95 points, or 0.73 pct, at 12,253.86
 *All 10 sectors weaker, gold shares top gainers
 (Updates with details, comments)
 By Claire Sibonney
 TORONTO, Aug 25 (Reuters) - Toronto's main stock market
index slipped in volatile trade on Thursday morning, reversing
early gains as U.S. stock indexes and oil prices dropped as
anxiety gripped markets over what U.S. Federal Reserve Chairman
Ben Bernanke would say in a speech on Friday.
 Sentiment was also hurt by a steep drop in U.S. heavyweight
Apple Inc (AAPL.O: Quote), a day after co-founder Steve Jobs resigned
as chief executive. [.N]  That news initially helped push up
shares of Apple rival Research In Motion RIM.TO but RIM soon
succumbed to the negative sentiment and fell 1.1 percent to
C$27.95.
 Resource shares were the biggest drag on the the index with
Suncor Energy (SU.TO: Quote), the heaviest decliner, down 2.2 percent
to C$29.61, followed by Potash Corp (POT.TO: Quote), off 2.4 percent
at C$53.36.
 Financials, which fell 0.4 percent, had initially led the
index higher, supported by news that Warren Buffett's Berkshire
Hathaway (BRKa.N: Quote) will invest $5 billion in Bank of America
Corp (BAC.N: Quote) and by optimism for domestic bank earnings after a
higher than expected profit posted by Bank of Montreal (BMO.TO: Quote)
on Tuesday.
 National Bank of Canada (NA.TO: Quote) lost 1.7 percent to
C$71.14, despite reporting on Thursday that quarterly profit
rose 15 percent, as analysts voiced concerns over narrower
margins on loans and other details of the report. [nN1E77O06N]
 Investors were nervous as they awaited a key speech by
Bernanke in Jackson Hole, Wyoming, due to considerable
uncertainty over whether he might signal plans for renewed
economic stimulus.
 Kate Warne, Canadian market strategist at Edward Jones in
St. Louis, Missouri, said it's much more likely that Bernanke
will simply go through a laundry list of actions the Fed might
be able to take if conditions deteriorate.
 "We could either see a negative market reaction because
there are expectations that the Fed will pull a rabbit out of
the 'hole' so to speak," she said.
 "But I think the other side is that investors could take it
as good news that the Fed is saying that even though we've seen
many weak indicators that we don't think the economy needs more
right now."
 At 10:55 a.m. (1455 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 89.95 points, or
0.73 percent, at 12,253.86. All 10 index sectors were weaker.
 Precious-metal shares were the lead gainers despite weaker
gold prices, which fell as much as $200 an ounce from record
highs above $1,900 reached on Tuesday. [GOL/]
 Barrick Gold (ABX.TO: Quote)was the most heavily weighted climber,
up 0.7 percent at C$48.55, followed by Goldcorp Inc (G.TO: Quote), up
0.4 percent at C$48.95.
 "People buy the fiscal gold when they're less comfortable
with risk, I think they're buying the gold shares because they
look very attractive compared to the gold price in an
environment where they're feeling a bit more comfortable with
risk," Warne said.
 ($1=$0.99.Canadian)
 (Reporting by Claire Sibonney; editing by Peter Galloway)